Private universities could be dealt a devastating financial blow if a policy proposing to end the placement of government-sponsored students in their facilities goes through.
Should Parliament approve the proposal, this could also have a ripple effect of many students missing out on university education due to the limited slots available in public universities.
According to the 2023-2024 Budget Policy Statement tabled in Parliament on Wednesday by Budget and Appropriations Committee Chairperson Ndindi Nyoro, the government wants to do away with the exchequer funding of private universities in the coming financial year.
The budget policy statement sets out the priority expenditures for the government for a given financial year.
"The State Department for Higher Education and Research, through the Kenya Universities and Colleges Central Placement Service (KUCCPS), should not place new government-sponsored students in private universities," the report reads in part.
Should Parliament approve the proposal, private universities will bear the brunt as they will lose much-needed financing that they have been relying on to run their institutions.
Reports indicate private universities have so far received Sh9 billion since the commencement of the policy programme in 2016. The programme was part of government’s strategy to ensure that students who scored a grade C+ (plus) were placed in universities and fully funded by the State.
Documents from the Universities Fund indicate that in the 2017/18 financial year, private universities received Sh1.6 billion as grants for 18,587 students. They got Sh1.98 billion in the 2018/19 fiscal year for 29,729 students, and a further Sh2.5 billion in the 2019/20 financial year for 43,676 students. In the 2020/21 financial year, government released another Sh2.7 billion for students.
Data relayed by universities indicates that the government pays for 20.79 per cent of the unit cost for government-sponsored students in private universities and 48.11 per cent in public universities.
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Some of the biggest beneficiaries from the funding programme include Mount Kenya University which gets Sh552.3 million for 12,479 students, and Kabarak University which pockets Sh357.9 million for 7,715 students.
Others are Catholic University of East Africa which receives Sh196.9 million for 4,685 students, Kenya College of Accountancy Sh223.9 billion for 5,142 students, University of Eastern Africa Baraton Sh183 million for 4,222 students and Zetech University which is allocated Sh115.4 million for 2,836 students. In the recent past, some institutions of higher learning have however elected not to admit government-sponsored students due to what they termed as underfunding from the State. They include Strathmore University and United States International University.
According to the Universities Fund, most public universities are on the verge of collapsing due to debt and inability to pay statutory deductions, such as Pay As You Earn (Paye), Sacco remittances, bank loan repayments and remittances to the NHIF and NSSF for health insurance and retirement benefits respectively.
The accumulated debt also includes payments for part-time lecturers and contractors, among others.
Universities owe contractors Sh1.4 billion, part-time lecturers Sh4.5 billion, suppliers Sh4.8 billion, and Saccos Sh4.1 billion. Documents tabled before the National Assembly Public Investments Committee on Governance and Education indicate the Sh8.7 billion received as grants is over and above the Sh12.1 billion private universities received from the Higher Education Loans Board (Helb).
The proposal by the State comes against the backdrop of financial turmoil in the institutions of higher learning, which are struggling to make statutory deduction payments.
It also comes at a time when Members of Parliament have raised issue with the funding programme and proposed a review of the same.