An Analysis of Kenya's New Higher Education Funding Model and its Implications on Equity, Quality, and Sustainability

Abstract

The government unveiled the New Higher Education Funding Model (NHEFM) in 2023, following the recommendation of the Presidential Working Party on Education Reform (PWPER). Under this model, universities and TVET colleges will no longer receive block capitation from the exchequer but instead will be funded through varied student loans, scholarships, and household contributions. Despite the government's good efforts to fund higher education, stakeholders reckon that NHEFM has not provided the much-needed relief. Emerging evidence suggests that students and their families often select university programs they can afford, rather than those for which they qualify and aspire to study. Furthermore, the 2024/25 HELB proposed budget can only fund 17.2% of the first-year students. The financial situation in HE is so dire that half of the public universities in Kenya are potentially insolvent due to their debt burden, which has hit 76 billion. These concerns prompted APHRC to conduct a rapid analysis of NHEFM, with the results highlighted in this report.