A recent analysis by the African Population and Health Research Center (APHRC) has raised alarms about the sustainability and equity of the country’s new higher education funding model.
The report, published in March 2025, has urged immediate reforms to ensure the models continue to serve students effectively.
The report highlights a concerning trend where the subsidy dependence index (SDI) has stagnated at 0.6 since 2016, indicating a growing reliance on government support.
At the same time, the ratio of revenue from loan recoveries has drastically dropped from 0.75 in 2012 to just 0.2 in 2023.
This signals a significant strain on the National Higher Education Financing Model (NHEFM), putting its long-term viability at risk.
In a move to salvage higher education funding, APHRC has recommended that the government overhaul the current funding model.
This is to allocate resources more equitably, tailoring scholarships and loans based on students' individual financial needs rather than generalised metrics.
“We recommend that the government, through the Presidential Working Committee on Review of NFM, recognise the fundamental flaws and inequities in the current Means Testing Instrument (MTI) and consider either a comprehensive overhaul or complete rplacement of the system with a more equitable approach that allocates funding based on individual MTI scores,” APHRC said.
“The MTI should also be redesigned to employ technology and innovative methodologies, allowing for precise determination of income levels from the lowest to the highest income thresholds.”
That, the Research Centre noted, would ensure that the most disadvantaged students are supported more effectively.
The report also highlighted the increasing inaccessibility of competitive programs, particularly in STEM fields like Medicine, Engineering and Veterinary Medicine.
It called for interventions to make these programs more affordable for ordinary Kenyans.
It suggested increasing scholarship allocations for these fields and rationalising tuition fees to keep them within reach of students from all backgrounds.
“It is recommended that the Presidential Working Committee on Review of the New University Education Funding Model singles out such programs and develops ingenious mechanisms to keep them within the reach of ordinary Kenyans,” it said.
Another key concern raised was the prevalence of corruption and inequities in the loan allocation process, with instances of false information, cheating and political interference influencing who receives funding.
The APHRC called for the adoption of technology-driven solutions to ensure a fair and transparent application process, free from human influence.
“It is concluded that this perception dents the image of HELB on the effectiveness of their MTI in targeting the most needy,” it stated.
“It is recommended that such perceptions be minimized through the Presidential Working Committee on Funding Reform (PWCFR) to input a policy that compels the funding agency to institutionalize the use of technology, such as in the application and means testing process devoid of human interference.”
The report also advocated for a graduated rate of funding, ensuring that financial resources are distributed based on students' actual needs, which would reduce the burden on taxpayers and ensure more efficient use of government funds.
To address the ongoing sustainability issues, the APHRC stressed the need for innovative financing models, including public-private partnerships, to secure additional resources for higher education.
The report also called for collaboration with private banks and encouraging corporate social responsibility initiatives, which could help alleviate the strain on government funding and provide a more sustainable way to finance student loans and scholarships.
APHRC stated that since the sustainability of the New Higher Education Funding Model (NHEFM) is in doubt, the government should develop funding policies that are aimed at living within its means.
However, it is also recommended that HELB develops ingenious means of loan recoveries and mobilization of resources that will not only improve revenue from lending but also improve ratio of revenue from external sources.
“The best practice would be to review the HELB Act 1995 and University Act (2012), and TVET Act (2013) and legislate a functional public-private partnership that encourages ingenious higher education financing and resource mobilization strategies through private banks for higher education loaning and tax rebates that encourage foundations and private entities to support charity,” it stated.
Overall, the APHRC called on the government, HELB, and other stakeholders to implement these recommendations swiftly, recognising that the future of students depends on creating a more sustainable and equitable higher education funding system
