The government has launched the New Higher Education Funding (NHEF) model for both scholarships and loans for students placed by Kenya Universities and Colleges Central Placement Service (KUCCPS).
The NHEF model takes effect with the admission of the 2022 Kenya Certificate of Secondary Education (KCSE) candidates into universities and colleges for the 2023-24 financial year.
The launch follows a directive by President William Ruto on May 3, 2023, that sought to overhaul the higher education student funding model by aligning placement, government scholarship and loans to the needs of students and their programme costs.
New Higher Education Funding(NHEF) model
The new funding framework seeks to offer students whose households are at the bottom of the pyramid equal opportunity in accessing university education and technical and vocational education and training (TVET).
Funding will be based on four criteria; choice of the programme, household income band, affirmative performance and government priority areas.
A Means Testing Instrument (MTI) will be applied to scientifically determine the need levels of students.
The instrument has eight variables, which have been used over the years and have been strengthened and linked to other databases to boost reliability.
The eight variables include parents’ background, gender, course type, marginalisation, disability as well as family size and composition.
By combining these variables, it is envisaged that the State will be able to determine the needs of the various households and fund them appropriately.
Based on MIT, students from rich backgrounds will get more loans than scholarships while the less able will get more scholarships than loans.
Under the new model, funding will be student-centred and be apportioned according to their levels of need classified into four; vulnerable, extremely needy, needy and less needy.
How the funding will be done under NHEF
Students falling under the vulnerable and extremely needy band will qualify for 100 per cent government funding.
Funding for their studies will be through scholarships and loans.
Those from needy and less needy households will get 93 per cent government funding, with the students bearing 7 per cent of the tuition costs.
Needy students joining universities will receive government scholarships of up to a maximum of 53 per cent and loans of up to 40 percent.
Their households will only pay for seven per cent of the cost of their university education.
Those joining TVETs will receive government scholarships up to a maximum of 50 per cent and 30 per cent in loans while their households will pay 20 per cent of the costs.
Of all the 2022 KCSE graduates, over 45,000 university students and 42,000 TVET students have been categorized as vulnerable and extremely needy.
Students who require funding MUST make formal applications through the Higher Education Financing portal http://www.hef.co.ke/ upon placement by KUCCPS.
Continuing students will not be affected by this funding model and will continue to receive their funding based on the Government’s existing model.
Funding the NHEF model
To facilitate the implementation of the new framework, the State has increased funding for university education.
In the 2023-24 financial year, the Kenya Kwanza government has increased the funding from Sh84.6 billion to Sh54 billion.
This translates to an allocation increase per student from Sh152,000 to Sh208,000.
The budgetary allocation for TVETs in the same financial year was increased from Sh5.2 billion to Sh10 billion.
This translates to Sh67,000 per year for each trainee.
Differentiated Unit Cost (DUC)
Currently, funding to universities is based on the Differentiated Unit Cost (DUC) model where funding is pegged on the number of undergraduate students registered on the regular programme and the kinds of courses they take.
However, the government has now changed to the NHEF to address inequities that saw the rich and the poor students receive the same amounts.
Under the DUC model, the government through the University Fund was expected to cater to 80 per cent of the unit cost while the remaining 20 percent was borne by students and the institutions.
This has, however, not been the case with the government funding ratio dropping steadily over the years to 48.11 per cent in public universities and 22 per cent in private universities.
The implementation of the DUC started in the financial year 2016/17, with critics fearing that it would favour big and older universities.
Before the DUC, each academic programme was allocated a flat rate of Sh120,000 per year per student.