NAIROBI, Kenya — The Government has proposed a major overhaul of Kenya’s university funding model that would eliminate scholarships for students in public universities and replace them with a fully loan-funded system.
The proposal is contained in the Tertiary Education Placement and Funding Bill, which is currently before Parliament and education stakeholders for consideration.
If enacted, students admitted to public universities would receive 100 per cent government funding, but the entire amount would be issued as a loan to be repaid after they secure employment.
Single Funding Framework
The proposed legislation seeks to consolidate all higher education financing under a single authority, replacing the current model in which students receive varying combinations of scholarships and loans depending on their level of financial need.
According to the Bill, the new authority would oversee the allocation, administration and recovery of higher education funding, with the aim of creating a more integrated and sustainable financing system.
The Ministry of Education says the reforms are intended to streamline funding by bringing together separate financing streams under one framework.
Graduates to Repay After Employment
Under the proposed law, graduates who secure formal employment would be required to immediately disclose their loan status to their employers to facilitate deductions from their salaries.
Those working in the informal sector would instead be required to enter into repayment agreements with the Higher Education Loans Authority (HELA), specifying how and when they will repay their loans.
To protect borrowers, the Bill proposes that loan deductions should not exceed 25 per cent of a beneficiary’s earnings.
Recovery of Defaulted Loans
The proposed legislation also grants the funding authority powers to recover unpaid loans through civil proceedings.
Any outstanding balances would be treated as civil debts, enabling the authority to institute legal action against beneficiaries who default on their repayment obligations.
Parliamentary Consideration
The Bill has already been tabled before the National Assembly’s Departmental Committee on Education, where it is undergoing stakeholder review.
It is expected to proceed to debate in the National Assembly, where Members of Parliament will determine whether to approve the proposed reforms.
If passed, the legislation would fundamentally change how university education is financed in Kenya, replacing the current scholarship-and-loan model with a system in which all government-funded university education is recoverable through loans after graduation.
