Inside education's Sh784 billion hole

Education Cabinet Secretary Julius Ogamba has pledged government support for several of Kuppet’s demands. [Jonah Onyango, Standard]

Kenya is spending Sh784.46 billion on education this financial year, more than the entire national budgets of Rwanda and Mauritius, yet schools and universities continue to report funding shortfalls, mounting debts and rising costs for learners.

The allocation, which accounts for nearly 28 per cent of the national budget, is bigger than the combined resources allocated to Kenya’s 47 counties and exceeds the entire annual budgets of several African countries. It covers everything from teachers’ salaries and free primary and secondary education to university funding, TVET, school feeding and infrastructure.

Yet the scale of the spending raises a fundamental question: how much of the Sh784 billion is translating into better learning, adequately funded institutions and lower costs for families, and how much is being lost to funding gaps, inefficiency, duplication and wastage?

The question is gaining urgency as public universities sink deeper into debt, schools complain of inadequate capitation and learners face rising costs across the education system.

President William Ruto’s administration is spending an amount on education that is almost the same size as the national budgets of countries such as Rwanda, Malawi and Mauritius.

An analysis by the Standard shows Kenya’s education budget is larger than the entire 2026/27 budgets of Mauritius and Rwanda, which stand at about Sh731 billion and Sh684 billion respectively. In both cases, Kenya is allocating more money to education alone than these countries have budgeted for all government functions combined.

At the same time, education receives more than any other ministry and its allocation is larger than the combined resources allocated to the 47 county governments.

The money supports a wide range of Government programmes, including teachers’ salaries, free primary and secondary education, university loans and scholarships, school feeding, TVET programmes and infrastructure development.

But four years after President Ruto came to power promising to transform the sector, questions remain over what the additional billions have delivered.

Education stakeholders are now questioning whether the increased spending is translating into better learning outcomes, adequately resourced institutions and lower costs for households, particularly amid persistent shortages and funding gaps.

Usawa Agenda Executive Director Dr Emmanuel Manyasa has called for stronger accountability in the implementation of education policies, with the organisation focusing on resource allocation and governance in the sector.

“We need to move beyond announcing large allocations and ask whether the resources are reaching schools, teachers and learners, and whether they are producing the intended results,” said Manyasa.

Boaz Waruku of Elimu Yetu Coalition also questioned the effectiveness of education spending and called for greater scrutiny of how funds are used.

“The question Kenyans are asking is whether the billions being allocated to education are reaching the learner and improving learning outcomes, or whether a significant portion is being lost through inefficiencies, duplication and wastage within the system,” said Waruku.

When he assumed office, President Ruto promised to increase capitation to primary and secondary schools to ensure adequate funding for free education.

The Presidential Working Party on Education Reform recommended increasing primary school capitation from Sh1,420 to Sh2,300 per learner. The administration also promised to address the persistent shortfall in secondary school capitation.

The official allocation for Free Day Secondary Education is Sh22,000 per learner. However, schools have continued to receive between Sh15,000 and Sh17,000 per learner, a shortfall that dates back to the previous administration.

During the 2022 campaigns, Ruto had promised to restore the allocation to Sh22,000. That promise, however, remains largely unmet.

In the first budget of the Ruto administration, for the 2023/24 financial year, Free Primary Education received Sh26.405 billion, up from Sh22.965 billion the previous year.

The allocation fell to Sh24.016 billion in 2024/25 before rising to Sh26.5 billion in 2025/26. The allocations translated into about Sh1,400 per learner, leaving the programme below the Sh2,300 capitation promised under the education reforms.

In secondary schools, although the Government is expected to provide Sh22,000 per learner under Free Day Secondary Education, schools have continued to receive between Sh15,000 and Sh17,000.

Over the four financial years under the Ruto administration, the Government has spent about Sh85 billion on the programme.

The result is that the capitation shortfalls inherited by the administration have persisted despite the increase in the overall education budget.

In universities, the financing question is even more complicated, with students and institutions having gone through repeated changes to the funding system since Ruto took office.

The latest flashpoint is another proposed overhaul of university financing, barely three years after the Government introduced the Student-Centred Funding Model to address longstanding problems associated with the previous system.

Introduced in 2023, the model replaced the Differentiated Unit Cost system and shifted funding from institutions to individual students. Learners were assessed according to financial need and placed in funding bands, with Government scholarships, HELB loans and household contributions making up the cost of education.

The model has faced criticism over student assessment, the level of support allocated to different learners and persistent funding gaps.

The Government is now proposing another overhaul through the Tertiary Education Placement and Funding Bill, 2026, which is before Parliament.

The proposed system would provide full funding to students admitted to public universities and TVET institutions through repayable loans. It would also create a single funding authority bringing together functions currently handled by the Higher Education Loans Board, Universities Fund and TVET Fund.

Under the proposal, scholarships would be scrapped and eligible students would receive 100 per cent funding in the form of loans. Graduates would begin repayment one year after securing employment, with deductions capped at 25 per cent of their earnings under the proposed legislation.

President Ruto has said the new system is intended to ensure that no qualified student is locked out of university or college because of their family’s financial circumstances.

The President announced in July that the Government wanted the new model implemented from September 2026, subject to Parliament approving the necessary amendments.

Students already admitted under the existing system would transition into the new framework if it is approved and implemented.

For an administration that came to power promising to resolve the financing problems in higher education, the proposal represents another major change in less than four years.

The uncertainty has been compounded by the worsening financial position of public universities, where Government funding has struggled to keep pace with the number of students requiring support.

Public university debt has risen from about Sh60 billion in 2022 to more than Sh100 billion, according to disclosures before Parliament. At least 11 institutions are technically insolvent, with some struggling to meet statutory obligations and other operational costs.

When Ruto took office in 2022, the 39 public universities were already grappling with chronic underfunding and mounting debts. His predecessor, former President Uhuru Kenyatta, had imposed a freeze on the establishment of new universities amid concerns over unchecked expansion.

The Ruto administration has nevertheless continued expanding the public university system, with Bomet University receiving a charter in 2026 and Nyandarua and Kabarnet being established as university colleges in 2025.

The administration also launched the Open University of Kenya in 2023, chartered the National Intelligence and Research University in November 2024 and licensed the Kenya Advanced Institute of Science and Technology.

The expansion has taken place against a backdrop of mounting financial pressure on existing institutions.

Egerton University has the largest debt at Sh25.5 billion, followed by the University of Nairobi with Sh16.99 billion, Technical University of Kenya at Sh14.13 billion, Kenyatta University at Sh12.79 billion and Moi University at Sh10.38 billion.

The liabilities include Sh26.34 billion in Pay As You Earn, Sh33.21 billion in pension, gratuity and insurance deductions and Sh18.63 billion in Sacco deductions.

Part-time lecturers are owed Sh4.69 billion, while suppliers are owed Sh4.17 billion. Banks and other lenders are also exposed.

In April, Higher Education Principal Secretary Beatrice Inyangala told Parliament that 11 universities were technically insolvent, down from 22, but warned that more institutions could fall into insolvency if underfunding persisted.

“We previously had 22 technically insolvent institutions, but that number has now improved to 11. However, if underfunding persists, more universities risk falling into insolvency,” she said while appearing before Parliament.

Inyangala attributed the universities’ financial problems to funding shortfalls.

The problem had also affected the previous Differentiated Unit Cost funding model, which was discontinued in 2023. By the time it was scrapped, universities were receiving only about 47 per cent of the funding they were expected to receive, meaning institutions got Sh47 for every Sh100 required.

Universities require Sh29.55 billion to fully fund students under the model, but the Government allocated Sh16.92 billion in the 2025/26 financial year, leaving a gap of Sh14.13 billion.

Funding coverage has also declined since the model was introduced. The Government met 100 per cent of the funding requirement in the first year, but coverage fell to about 64 per cent in the second year and 57 per cent in the latest cycle.

At the same time, the number of students receiving support has continued to rise.

Currently, 437,648 students are funded under the model across three cohorts — 122,634 admitted in 2023, 134,889 in 2024 and 180,125 in 2025.

A fourth cohort of 270,000 students is expected later this year, adding further pressure to an already strained system.

“The budget allocation of 2025/26 remained the same as the previous financial year despite the entry of a new cohort of 180,125 students,” Inyangala told MPs while appearing before the National Assembly Committee on Education.

She attributed the crisis to “a mismatch between projected and actual disbursements”.

Even as the Government pushes  TVET as a pathway to skills development and employment, rising training costs are raising concerns over access and completion.

Fees at public Technical and Vocational Education and Training institutions have nearly doubled following the introduction of the modular curriculum in May 2025.

The Kenya Union of Technical and Vocational Education and Training Trainers (KUTVET) says tuition has risen from about Sh56,000 to Sh105,000 a year.

The union says the increase is putting pressure on learners, particularly those from poor and middle-income households, with concerns that higher costs could contribute to low enrolment and increased dropout rates.