Universities Fund warns Sh28 billion funding deficit threatens salaries, scholarships and learning

Universities Fund warns Sh28 billion funding deficit threatens salaries, scholarships and learning
Universities Fund warns Sh28 billion funding deficit threatens salaries, scholarships and learning - HELB Chief Executive Officer Geoffrey Monari (left) during a meeting with the Parliamentary Departmental Committee on Education on July 16, 2026. (Photo: HELB)
HELB Chief Executive Officer Geoffrey Monari (left) during a meeting with the Parliamentary Departmental Committee on Education on July 16, 2026. (Photo: HELB)

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The Universities Fund warns that persistent budget deficits are threatening salaries, scholarships and the financial sustainability of public universities, putting the quality and continuity of higher education at risk.

Public universities could struggle to meet their core obligations, including paying staff salaries, if persistent budget deficits continue, the Universities Fund has warned, raising concern over a Sh28 billion funding gap affecting scholarships and university financing.
The fund said continued underfunding is threatening the operations of public universities and putting the quality, accessibility and continuity of university education at risk.
In documents tabled before the National Assembly Committee on Education, the fund said the financial shortfall has weakened its ability to finance public universities in line with the required resource levels and the assessed scholarship and capitation needs.

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While updating the committee on the utilisation of its budget for the 2025/26 financial year, the fund warned that public universities risk defaulting on their core operational obligations if the annual budget deficits persist.
During the year under review, the fund told Parliament that under the student-centred funding model, it required Sh29 billion but received only Sh18 billion, leaving a funding gap of Sh11 billion.
It also told the committee that under the Differentiated Unit Cost (DUC) capitation model, it required Sh40 billion, but only Sh23 billion was approved, resulting in a Sh17 billion deficit. Combined with the shortfall under the student-centred funding model, the total funding gap stood at Sh28 billion.

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“The funding gap has implications for the financial sustainability of public universities. Since scholarship funds are remitted directly to universities to support tuition costs, any shortfall in scholarship financing may constrain university cash flows and contribute to the accumulation of institutional pending obligations related to their recurrent operational expenditures,” the acting CEO of the fund, Edwin Wanyonyi, told the committee.
The Universities Fund provides scholarships to students under the new higher education funding model.
The fund further told the committee that the financial deficit has reduced its capacity to finance universities in line with the required resources and the assessed scholarship and capitation levels.

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