PS Inyangala admits crisis in university funding model

Principal Secretary for Higher Education Beatrice Inyangala. [File, Standard]

The government has admitted that President William Ruto’s university funding model is under strain after it emerged that billions of shillings needed to finance scholarships and student loans are unavailable, exposing public universities to a deepening financial crisis.

Principal Secretary for Higher Education Beatrice Inyangala told the National Assembly Education Committee that the current funding mechanism is not aligned with the demands of the new student-centred funding model, resulting in huge financing gaps that are threatening university operations.

Documents tabled before the committee show that the total funding requirement for scholarships, university capitation and student loans stood at Sh70.39 billion during the 2025/26 financial year against an approved budget of Sh41.423 billion, leaving a funding deficit of Sh28.97 billion.

The shortfall, PS Inyangala warned, has significantly reduced the Universities Fund’s ability to finance institutions at the levels required under the new funding model.

“The shortfall limits the Fund’s ability to fund universities at full levels, constrains university cash flows and increases the risk of pending obligations that may affect teaching, learning, research and institutional operations,” Inyangala said in its report to MPs.

The presentation now opens the lid on the financial pressure facing universities under the model adopted in 2023.

Inyangala told MPs that one of the biggest challenges is that the mechanism used to finance higher education has not kept pace with the funding model itself, creating persistent deficits that have left universities struggling to meet their obligations.

The funding gaps have already translated into mounting debts across the public university system.

MPs also questioned the sustainability of the government’s university funding model, saying vice chancellors had complained that institutions were receiving significantly less money than they required to support teaching and learning.

Nabii Nabwera, MP Lugari, told the committee that vice chancellors from several public universities had informed him that the government had adopted a practice of releasing student upkeep funds ahead of tuition payments, leaving universities without adequate operational resources.

Nabwera questioned whether such a funding arrangement was sustainable and warned that institutions were being pushed back into the financial crisis that the new university funding model was meant to resolve.

Inyangala, however, defended the funding model, insisting that it remains functional.

“The model is functional,” she told the committee.

She argued that the real problem lies not with the model itself but with the mismatch between the resources required by the sector and the amounts eventually allocated through the national budget.

“The mechanism of funding has not aligned with the model. Even if this model was changed to another one, if the budgeting allocations are not aligned to the requirements, we will still have problems,” she said.

The PS explained that the Ministry submits its funding requirements based on the actual cost of student scholarships and loans, but Parliament eventually appropriates lower amounts than what is required.

“We have come very respectfully to this committee and presented our requirements, but what has been appropriated has not been equivalent to the requirements for loans and scholarships,” she said.

According to the report, public universities had accumulated pending bills worth Sh100.3 billion by January 31 this year.

The largest share of the unpaid obligations comprises statutory deductions amounting to Sh33.213 billion, followed by unpaid salaries and wages of Sh26.341 billion, unremitted SACCO deductions worth Sh18.632 billion, capital project obligations of Sh3.025 billion, unpaid suppliers owed Sh4.168 billion, part-time lecturers owed Sh4.688 billion, and other liabilities amounting to Sh5.507 billion.

The report shows that several institutions are also yet to remit deductions to agencies, including NHIF, NSSF, NITA, HELB, banks and housing levy collections.

The State Department acknowledged that the growing pending bills have not been provided for in the approved 2026/27 budget, increasing pressure on institutions already grappling with cash flow constraints.

To prevent the debt from worsening, MPs on Thursday directed universities to treat pending bills as the first charge on available resources.

The committee has equally directed universities to halt the commencement of new projects where existing development projects remain stalled.

The report also reveals that universities continue to grapple with numerous stalled infrastructure projects.

A total of 80 capital projects are currently under implementation across public universities.

Of these, 24 projects are more than 80 per cent complete, seven are between 60 and 79 per cent complete, while 49 projects remain below 60 per cent completion.

The government estimates that completing the projects will require an additional Sh42.1 billion, with the bulk of the money, Sh38.4 billion, needed for projects that are less than 60 per cent complete.