The Universities Fund has raised alarms over a significant budget deficit of Sh28 billion that is jeopardizing the financial stability of public universities across Kenya. The shortfall threatens the payment of staff salaries, the provision of scholarships, and the overall quality and accessibility of higher education.
In a report presented to the National Assembly Committee on Education, the Fund highlighted that under the 2025/26 financial year, it required a total of Sh69 billion to adequately support public universities but received only Sh41 billion, creating a funding gap of Sh28 billion.
Breakdown of Funding Deficits
- Under the student-centred funding model, the Fund needed Sh29 billion but was allocated Sh18 billion, leaving an Sh11 billion deficit.
- For the Differentiated Unit Cost (DUC) capitation model, Sh40 billion was required, yet only Sh23 billion was approved, resulting in a Sh17 billion shortfall.
According to Edwin Wanyonyi, the acting CEO of the Universities Fund, this persistent underfunding compromises the Fund’s ability to finance universities according to assessed needs and disrupts scholarship disbursements, which are critical for supporting tuition costs.
“The funding gap has serious implications for the financial sustainability of public universities. Since scholarship funds are paid directly to institutions, any shortfall affects cash flow and leads to accumulating unpaid operational expenses,” Wanyonyi explained.
The Fund cautioned that if the current budget deficits continue, public universities may fail to meet essential obligations including staff remuneration and maintaining learning standards, thereby threatening the continuity of higher education services.
