Cash crunch: Public universities woes pile amid Sh61 billion debt

University students camp outside The National Treasury during a peaceful demonstration to push for immediate release of HELB funds on February 3, 2023. [Wilberforce Okwiri,Standard]

Details have emerged of the new financial crisis facing public universities, with debts they owe statutory bodies rising to Sh61.1 billion.

It has also emerged that the government owes these institutions of higher learning Sh165 billion, further diminishing hopes of redeeming the situation.  More disturbing, also, is the revelation that more 140,000 students may miss out on State funding to pursue their dream careers in universities.

These are the new details that were laid bare on Friday last week when National Assembly Education Committee met senior officials from Ministry of Education. The meeting heard that pending bills in public universities and constituent colleges had risen to Sh61.1 billion up from Sh54.49 billion eight months ago as at June 30, 2022.

Out of the amount, Sh17.7 billion is owed to Pay as You Earn (PAYE), another Sh24.5 billion towards unremitted pension and some Sh3 billion towards other payroll deductions.

Universities also owe Sh2.9 billion on deferred salaries, Sh7.7 billion to suppliers, Sh3.2 billion unpaid part-time lecturers and prepayments, and fees refunds totalling Sh0.9 billion.

Speaking before the Parliamentary Select Committee on Education, Higher Education and Research PS Beatrice Inyangala said student loan financing has not been in tandem with increased enrolments and rising student needs. ‘‘In the current financial year, 140,000 more students have applied for loan from the Higher Education Loans Board (Helb) to a tune of Sh5.7 billion, meaning the same number will miss the grant,’’ Inyangala said.

Helb CEO Charles Ringera said 75 per cent of the requested funds had already been disbursed to the institutions.  

However, Ringera said 140,000 students had not been considered in the disbursement as they were not part of the lot that applied during the last financial period.

The learning institutions also are crippling with the continued reduced financing of the Differentiated Unit Cost (DUC) up to 48 per cent, which has affected operations and quality of education in universities.

The PS, however, said the government is looking for ways of getting the universities out of the woods. ‘‘We are engaging Council members of Egerton and the Head of State on how to bail them out. We have written to the Treasury to assist with Sh243,941,701 in order to pay part of the accrued Sh553 million salaries at the institution,’’ Inyangala said.

The legislators urge the government to waive unremitted deductions owed to Kenya Revenue Authority (KRA) and enhance funding to universities to avoid further accumulation of bills. It also emerged that despite funding of research programmes in institutions of higher learning and research institutions, there is little commercialization of research outputs.

‘‘We have been charging Sh16,000 as fees since 2016 which is not in tandem with the inflation, which compromises the quality of university education,’’ said Inyangala.

In the recent past, public universities have continued to accumulate huge pending bills that have crippled their operations.

Even with the government’s emphasis on science and technology courses, funding of capital projects in universities continue to go down, leading to accumulation of bills, penalties, interests and lawsuits.

It emerged that the capital grants to universities has reduced to a tune of Sh2 billion forcing many projects to drag.

The delay has denied learners access to crucial infrastructure such as laboratory, tuition and research needs.