Shock awaits university students in government proposed funding plans

These are part of the far-reaching proposals by the Higher Education Loans Board (Helb) and Universities Fund (UF). Charles Ringera and Geoffrey Monari are the present chief executives of Helb and UF respectively.

The two reports were presented to Presidential Working Party on Education Reforms formed by president William Ruto. President Ruto appointed the 49-member team, chaired by Prof Raphael Munavu to among other things, review and recommend a governance and financing framework for TVET training and development, university education, research and training.

Financing to universities take the form of grants sent through government capitation for both recurrent and capital expenditure. Today, all KUCCPS students admitted in universities receive automatic capitation sent to the various institutions.

There is also student financing in the form of loans, bursaries, and scholarships administered by the Higher Education Loans Board (Helb), however, these are done on needs basis through approved criteria. Universities Fund allocates 80 per cent of University funding per student through grants based on Differentiated Unit Cost (DUC) while the remaining 20 per cent is funded by Helb through loans, bursaries, and scholarships and households.

However, in separate presentations to the task force, the two funding bodies have made far-reaching proposals of what they believe is the future of education funding for all students in the country. In their strong recommendation, the two bodies want only deserving students to get State funding disbursed through a clear criterion that focuses on the needy cases only.

Helb and UF argue that all students placed by KUCCPS must not automatically get State funding as is the present case.

"KUCCPS placed students shall be allowed to express interest for government grants and loans to finance their tertiary education unlike the current situation where grants are allocated to all KUCCPS placed students regardless of the need for the funding," reads a proposal by Helb.

The agencies say that grants should be applied on need basis for purposes of fair distribution of merged resources. The plan is in line with the Kenya Kwanza Government manifesto that envisaged a merger of all funding boards with a view of harmonising all tertiary education funding entities.

Merge funding agencies

Through his campaign manifesto, president Ruto promised to amalgamate HELB, the Technical and Vocational Education and Training (TVET) Fund, and University Fund with a view of harmonizing and merging all tertiary education funding entities into one National Skills and Funding Council (NSFC). In their memorandum seen by The Saturday Standard, Helb and UF have supported President Ruto's proposal to merge the funding agencies.

"It is important to consolidate and declare all available government funds (grants, loans, scholarships as well as bursaries) to students, parents, and guardians to allow them to make informed decisions on the funding mode depending on their financial need," reads Helb report.

This view is also shared by UF. The agencies agree that the move will release funds from those who do not want government grants thus increasing the available funds to needy citizens and help in better targeting for students' financial support. The proposed paradigm shift by Helb and UF resonates with the thinking of the president.

In a recent interview, President Ruto questioned how the Government supports many students with little money instead of supporting those it can with the adequate resources. President Ruto noted that many parents who have been able to sponsor their children in academies in basic education paying huge sums of money also rely on State for university funding, edging out vulnerable students.

"We have parents with students in academies all through from Standard One to Form Four where they pay up to Sh200,000, but when they go to university we want to tell them we can pay for all of them," Ruto said.

"We need to be honest with ourselves and let those who can afford to pay. And let us think on how we can assist those who cannot afford rather than pretending that we are going to support all the children even when we are not in the position to," Ruto said.

HELB and UF now argue that presently, the Differentiated Unit Cost (DUC) funds students without their consent and/ or that of their parents or guardians. DUC is the annual cost of providing a particular degree programme per student, taking into account staff costs, facility costs, and other institutional overhead costs.

DUC criteria established by the UF is expected to consider parameters such as student numbers, staff costs, student-staff ratios, costs of infrastructure and operations, student load types, and levels of programmes. In its report, UF says that despite the reduced funding level through DUC allocation, funding has continued to all students placed by KUCCPS irrespective of whether they do or do not require the funding.

"Students have not been required to express interest in their need for a government grant in pursuit of university education. Some parents and/guardians may opt to fully sponsor their student's university education without government grants," reads the report.

UF is also fronting a plan to issue students with payment vouchers which they can use to pay for courses in universities and to ensure only eligible students get State funding. If implemented, the voucher system would make it possible for students to transmit tuition payments to another institution should they seek to transfer to that college.

Presently, students seeking to transfer from one college to another do not move with the money, distorting the funding plan and accountability of the finances. If adopted, there shall be full scholarship, partial sponsorship as per the current levels and partial sponsorship for students.

"A criterion to be established for students to apply. Students apply for sponsorship based on set criteria. All students who must pay tuition fees should be eligible for a student loan. It is proposed that student loans should be differentiated to reflect the actual cost of the programmes they are enrolled in," reads the UF report.

The two agencies also argue that the present disjointed funding plan had led to multiple allocations of monies to students which created gaps as many students missed out.

Draw capitation

"The current tertiary education funding situation is one where-by, one student has multiple funders in form of government institutions as allocated by UFB, HELB, Counties, NG-CDG and other sector priority needs by MDAs, yet all are drawing capitation from the exchequer," reads presentation by Helb.

In their memorandum, the bodies argue that Universities Fund makes financial allocation to universities based on the number of enrolled students for tuition fees subsidy and development. Yet, the same student is funded by Helb through loans to cater for tuition fees and upkeep.

"The operational costs of running various government institutions notwithstanding, there is uncoordinated appraisal of the students' financial needs, funds are released at different uncoordinated times and different data sets of the same student are held differently in different government institutions of the same sector," reads Helb presentation.

According to the reports, the current structure of funding universities is through Grants channelled directly from the Ministry of Education State Department of University Education as allocated by the Universities Fund based on Differentiated Unit Cost. This funds up to 80 per cent. The balance of 20 per cent, the report says, is financed through Loans, Bursaries and Scholarships from Helb or where the household can afford, they finance the balance.

In addition to these, Helb gives loans and bursaries to the vulnerable by increasing equity and access to University Education through an elaborate criterion that determines the vulnerability of the loan applicants. Support for students in TVET colleges is split between grants (Sh30,000) paid directly to the college as tuition by State Department of Vocational Technical Training.

Helb tops up another Sh40,000, split into tuition of Sh26,600 and upkeep Sh13,400.

"The proposed amalgamation of the tertiary education funding entities is a tactically well-thought-out recovery strategy and a step in the right direction to create efficiencies in funding higher education," reads Helb statement. And now, the agencies argue that there have been multiple beneficiaries who deny others chance and note that one funding body will cure the problem.

"This will help the country in avoiding a situation whereby one student is funded by various government agencies, yet all are drawing capitation from the exchequer."

Overall, the two funding bodies agree that the current system has not offered a one-stop-shop for university education financing needs and acknowledged the desire for a coordinated education financing plan.

In supporting the merger, the two agencies say that the new funding body will be a One-Stop-Shop for tertiary education financing needs, ensure equity and better distribution of available resources and also provide a common structured Mechanism for Resource Mobilization.