New university funding model will deepen inequality

New Funding Model has shifted universities to businesses.[iStockphoto]

The government has announced plans to remove university funding from the national budget and move higher education towards a market-based financing model from October 2026. The proposal comes as Kenya is grappling with the consequences of its new student-centred higher education funding model, under which university and TVET students receive different combinations of scholarships and loans depending on their assessed financial need.

On the surface, this may sound like a technical solution to a fiscal problem. The government is under enormous pressure to reduce expenditure, universities are struggling financially, and public resources are increasingly constrained by debt repayments and competing demands. But education is not simply another line item in a government's spreadsheet. The question of who pays for education is ultimately a question about who is entitled to knowledge, who is allowed to imagine a future, and what kind of society the State is prepared to build. A market-based approach risks transforming education from a public good into a private commodity whose availability increasingly depends on one's ability to pay the loan that will be imposed on all students.

Kenya has, of course, been moving in this direction for decades. Immediately after independence, public university education was effectively treated as a public responsibility. The State funded tuition and other costs for students, reflecting a broader post-independence understanding that expanding education was essential to building a newly independent nation. That model did not last long. In the 1991-92 academic year, the government introduced cost-sharing, shifting part of the burden of higher education from the State to students and their families. The policy emerged during a period of economic crisis and structural adjustment, when international financial institutions were advocating reductions in public expenditure and greater cost recovery across public services.

By the late 1990s and 2000s, universities increasingly relied on student fees and alternative sources of income to supplement government allocations. The expansion of parallel or Module II programmes meant that students outside the traditionally subsidised system could pay substantially more for university education. Research on Kenyan higher education financing shows that although government expenditure on universities increased in absolute terms over parts of this period, government funding declined as a proportion of total university expenditure. In other words, the State did not necessarily stop spending on universities; it increasingly stopped being the institution expected to carry the principal financial responsibility for them.

The current proposal should therefore not be understood as an isolated policy innovation. It is another step in a much longer process of withdrawing the State from the direct financing of higher education. The new student-centred funding model introduced in 2023 already represents a significant reorganisation of this relationship, with funding increasingly attached to individual students through scholarships and loans rather than being understood primarily as institutional public financing.

This is particularly troubling for a country in which educational inequality already mirrors broader inequalities of class, geography and social status. A market does not distribute education according to who needs it most. It distributes access according to purchasing power, expected returns and perceived financial risk. The disciplines most valuable to society are not always those most profitable in the market. Universities need historians, philosophers, sociologists, lawyers, artists, researchers and political theorists just as much as they need engineers, accountants and computer scientists. A university exists partly to produce workers, but it also exists to produce citizens with knowledge and ideas.

 

There is an additional danger when universities themselves are forced to behave increasingly like businesses. Institutions under financial pressure have incentives to prioritise programmes that generate revenue, attract fee-paying students or satisfy immediate employer demand. Research whose value cannot be easily monetised becomes harder to justify, and departments serving smaller or poorer populations become vulnerable. A"

This is where Kenya's colonial history becomes impossible to ignore. Colonial education was never designed simply to educate Africans, but was structured according to the needs of the colonial economy and racial hierarchy. European education was privileged while African education was deliberately restricted, unevenly financed and frequently oriented towards producing a labour force suitable for colonial administration and economic production. Historical accounts of colonial education in Kenya show the development of differentiated educational systems, with African education constrained by the political and economic priorities of colonial rule.

Kenya's post-independence project was partly an attempt to reverse the colonial distribution of knowledge: to expand the educated African population and use education to build a sovereign nation. The steady retreat from public financing represents a retreat from that political commitment.

The proposed October 2026 shift should therefore be understood as a statement about what the Kenyan state believes education is for. If education is a public good, then the state has a responsibility to make it accessible regardless of whether an individual is profitable to educate. If education is a commodity, then access will increasingly be determined by the market. For a country whose colonial history was built partly upon controlling African access to knowledge, Kenya should be extremely careful about recreating educational exclusion through the language of fiscal responsibility and market efficiency. We may no longer have colonial administrators deciding who deserves an education, but if the ability to access knowledge increasingly depends on the ability to pay for it, and relies on a market that gambles on the future of the youth, the outcome can still be profoundly unequal.