State proposes Sh68 billion budget increase to tackle education crisis

The government has proposed a Sh68 billion increase in its budget for the upcoming financial year, raising the total expenditure to Sh4.3 trillion.

This increase, outlined in the Draft 2025 Budget Policy Statement released on Wednesday, aims to address several pressing challenges in Kenya's education sector, with nearly 90 per cent of the additional funds allocated to education.

The proposed increase comes amid ongoing challenges in the university education funding model, particularly after the High Court ruled in December that the government's new funding system, known as the Variable Scholarship and Loan Funding (VSLF), is unconstitutional.

Justice Chacha Mwita found the model biased, claiming it introduces financial bands that unfairly target students from wealthier families.

Despite this, the government has vowed to appeal the decision, insisting that the model is fair and offers scholarships and loans to all students.

Under the VSLF, funding for students in public universities is a mix of government scholarships, loans, and family contributions.

Household income

The funding is structured into bands based on household income, with students from lower-income families receiving more scholarships, while those from higher-income households receive more loans.

The new budget proposal includes a Sh26.3 billion increase for the State Department for Higher Education and Research, with Sh22 billion earmarked for the VSLF.

The State Department for Technical and Vocational Training will also see a boost of Sh14.63 billion in its allocation.

Additionally, the Teachers' Service Commission is set to receive Sh10 billion more to fund the second phase of salary adjustments for teachers, while Sh3.02 billion is allocated to recruit Early Childhood Development (ECD) teachers.

The education sector is also set to benefit from ongoing reforms outlined in the Presidential Working Party on Education Reform Report.

These reforms are aimed at promoting quality and inclusive education, training, and research, contributing to Kenya's long-term socio-economic development.

The government's proposed budget for the next fiscal year reflects Sh3.07 trillion in recurrent expenditure, Sh804.7 billion for development and Sh442.7 billion for transfers to counties.

The fiscal deficit is projected at Sh759.4 billion, or 3.9 per cent of GDP, compared to 4.3 per cent in the current financial year.

To cover this deficit, the government plans to raise Sh213.7 billion from external financing and Sh545.8 billion from domestic sources.