New varsity financing model targets private capital

It costs at least Sh1.5 million to complete a Bachelors degree programme under the parallel model.

In UK, the maximum tuition fee amount that can be charged to domestic students is around Sh350,000 per annum for a three-year undergraduate course.

Educationists say failure to push through new financing solutions could throw the sub-sector into an admissions crisis that will deny thousands of qualified candidates a chance to pursue higher education.

“We have had to think of a mix of financing options but when it comes to borrowing, the interest rates are still too high,” said Prof Freida Brown, the vice chancellor at the United States International University (USIU) in a previous interview.

According to the new proposals fees increment will be offset by loans taken from Helb –– disbursed on per semester basis ranging from Sh35,000 -Sh60,000.

But the loans –– currently issued at four per cent for regular students–-could come at triple the cost, with the experts proposing they be based on the government borrowing rate currently between seven and 12 per cent or the prevailing market rate which averages 14 per cent.

Kenyan public universities received Sh11.2 billion worth of State subsidies in the last financial year, down from Sh14.2 billion a year before–- a 16.2 per cent drop.

Education officials said the universities were spending double the amount sourced from commercial avenues to supplement incomes.