Financial crisis hits private universities as state owes them Sh50 billion in unpaid student sponsorship funds
Kenya Association of Private Universities warns that the financial strain is affecting the operations of private universities, which are struggling to cover costs.
The government is facing fresh financial pressure from the higher education sector following a demand by private universities for Sh50 billion in unpaid student sponsorship funds.
The Kenya Association of Private Universities (KAPU) says the debt has been accumulating since 2016 when the government started placing and sponsoring students in private universities.
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While the programme was discontinued in 2023, many students under the scheme are still studying, yet funds for their sponsorship have not been disbursed.
KAPU warns that the financial strain is affecting the operations of private universities, which are struggling to cover costs.
The demand comes as public universities also grapple with financial woes, including an Sh80 billion debt owed to creditors and government agencies such as the Kenya Revenue Authority.
The 34 vice-chancellors of private universities, who met in Mombasa to discuss the state of the institutions, urged the government to settle the pending bills to ease their financial burden.
"KAPU appreciates the collaborations with the state in developing human capital. In the course of these collaborations, the government has not met its financial obligations and owes the private universities about Sh50 billion in unpaid disbursements for students, most of whom have graduated," said KAPU Chairman Stephen Ngari.
The Catholic University of Eastern Africa (CUEA) Vice-Chancellor echoed the concerns, saying financial challenges have significantly affected private universities.
Expedite funds settlement
"We respectfully urge the government to expedite the settlement of the Sh50 billion pending bills, which span from the 2015–2016 academic year to the present, because there are still continuing students for whom the State is not disbursing the promised allocations," the CUEA VC said.
Despite the financial setbacks, KAPU acknowledged the government's recent approval of bridging programmes for students who did not meet the C+ university entry requirement. These programs will offer students a second chance to advance their education.
Prof Ngari stressed the role of private universities in national development.
"Our institutions not only contribute to the educational advancement of thousands but also actively participate in initiatives that foster innovation and entrepreneurship," he said.
He added that private universities play a crucial role in job creation, helping to tackle youth unemployment.
KAPU Treasurer Washington Okeyo highlighted the financial demands of running universities.
"All these require resources; for instance, in teaching, a university has to develop infrastructure facilities and maintain them, as well as provide various amenities, such as electricity, water, and sanitation that are required daily when students are on campus. Universities also hire lecturers and professors to teach students, and we also have administrative staff that require money," he said.
Prof Okeyo, who is also the vice-chancellor of the Management University of Africa, said the institutions are struggling under difficult financial conditions.
Fixed costs
"If the state has not remitted that amount of money, then it becomes very difficult for universities to operate due to the fixed costs that are incurred regardless of whether there is any activity like teaching or supervision," he said.
The universities have been forced to seek financial assistance from banks to keep running.
"What we haven't done as private universities is send students home despite the government owing us Sh50 billion. It means we are very philanthropic, that we are offering scholarships directly and indirectly to the students. A number of those students graduated two years ago, yet we haven't been paid. The state should pay us so that we pay the loans we have taken," Okeyo said.
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