Ruto promises free university education after three failed funding experiments

President William Ruto has unveiled yet another plan to overhaul university financing, promising that every student admitted to a public university or college will receive full government funding regardless of their financial background.

The proposal, contained in amendments before Parliament, marks the latest shift in universities and colleges' financing under the Kenya Kwanza administration and comes barely three years after the rollout of the Student-Centred Funding Model (SCFM), which replaced the Differentiated Unit Cost (DUC) funding system.

If adopted, it will become the fourth change on university financing under President Ruto's administration, from the Differentiated Unit Cost model, two variations of the Student-Centred Funding Model and now to a universal funding within a span of less than four years.

Speaking at State House while receiving the report Developing a New Vision for Kenya: Towards a First World Nation, the President said the government had reviewed previous funding approaches and resolved to adopt a universal model that guarantees financing for every student placed in a university or college.

"We have tried the differentiated model. It did not work because it made most universities close down. Going forward, any student who has passed and is placed in a college or university, each of them will get full funding for their education," the President said.

However, the announcement comes against the backdrop of major underfunding of the current model that has left universities indebted as the government fails to provide full funding required to finance students' education.

Data presented before the National Assembly shows that budgetary constraints in funding universities have left universities reeling under a Sh57.65 billion deficit for loans and Sh16.56 billion for scholarships in the 2026/27 financial year.

The funding gaps have emerged consistently since the introduction of the Student-Centred Funding Model.

Apart from its first year of implementation, when the programme received full financing, every subsequent financial year has recorded deficits as student numbers increased faster than government allocations.

This comes as the number of students requiring government financial support is expected to increase sharply this year following the admission of a record number of students into universities and colleges.

Higher Education Loans Board (HELB) Chief Executive Geoffrey Monari told MPs that the September intake will increase the number of students requiring financial support to 1,199,423 during the 2026/27 financial year, the highest number in the agency's history.

HELB estimates that financing the projected beneficiaries will require Sh114.36 billion.

The approved allocation stands at Sh56.71 billion, leaving a financing gap of Sh57.65 billion.

Monari told MPs the expansion of the Student-Centred Funding Model significantly increased the number of students eligible for government support, resulting in financing requirements growing faster than available budget allocations.

The funding pressures extend beyond student loans.

Budget estimates tabled in Parliament show universities will require Sh47.36 billion next financial year to finance students under the Student-Centred Funding Model.

The National Treasury has allocated Sh30.8 billion.

The allocation leaves a financing deficit of Sh16.56 billion, meaning universities will receive only about 65 per cent of the amount required to support government-sponsored students.

The Ministry of Education has also acknowledged the strain facing the current financing framework.

Appearing before the National Assembly Committee on Education last week, Higher Education Principal Secretary Beatrice Inyangala told MPs that the total funding requirement for scholarships, university capitation and student loans during the 2025/26 financial year stood at Sh70.39 billion against an approved budget of Sh41.42 billion.

She said the financing gap had reduced the Universities Fund's capacity to finance institutions at levels required under the Student-Centred Funding Model.

"The shortfall limits the Fund's ability to fund universities at full levels, constrains cash flows and increases the risk of pending obligations that may affect teaching, learning, research and other operations," Inyangala told the committee.

The financing challenges are unfolding as public universities prepare to admit the largest number of government-sponsored students in more than a decade.

Data from the Kenya Universities and Colleges Central Placement Service (KUCCPS) shows a record 270,715 candidates qualified for degree programmes after the 2025 KCSE examination.

The increase in university qualifiers comes as institutions continue grappling with financial pressures that have pushed public university debt to nearly Sh100 billion.

Ministry of Education data also shows university enrolment has declined despite the increase in students qualifying for admission.

The Education Sector Report indicates enrolment dropped from 680,768 students during the 2023/24 academic year to 547,092 in 2024/25, representing a decline of 133,676 learners within one year.

The ministry attributes the decline largely to changes introduced under the new funding and placement system, which redirected some learners to Technical and Vocational Education and Training (TVET) institutions.

The decline reversed four consecutive years of growth in university enrolment and returned student numbers to levels last recorded around the 2019/20 academic year.