Vice-chancellors have revived the petition to increase tuition fees in public universities in the latest efforts to keep the institutions afloat.
A memo from the Ministry of Education has revealed the push by the top university administrators for the upward review of fees in the next intake of first years.
The memo follows a meeting of vice-chancellors on September 23 that sought policy options to ensure financial sustainability of the universities as some rely on short-term loans to finance their operations.
The officials had earlier proposed that tuition fees be increased to Sh48,000 from the current Sh16,000 for fresh students to ease cash flow challenges that have affected service delivery.
Tripling the fees will mark the first major shake-up of university fees since the end of free university education in 1991 and the introduction of the student loans scheme – the Higher Education Loans Board (Helb) -- in 1995.
The push for review of the fees comes at a time universities are experiencing a sharp fall in enrolment on self-sponsored programmes after the government opted to fully fund students scoring the mandatory C+ grade in the Kenya Certificate of Secondary Education (KCSE) exams.
Students enrolling for the parallel degree programme courses had over the years generated billions for the institutions. “The students paying should pay realistic tuition fees. Thus, review the Sh16,000 tuition payable since 1992,” reads a resolution made by the vice-chancellors.
They petitioned the State and University Funding Board (UFB) —which is mandated to cost university courses and fees afresh—to approve the upward review of tuition charges.
The vice-chancellors propose that the enhanced fees be introduced for fresh students who will join universities from mid-next year to ease opposition from continuing learners.
Of the current annual average fees of Sh26,000, tuition charges, which have remained unchanged from 1995, take Sh16,000, with the student paying Sh8,000 and the other half settled by Helb. The remaining bit is taken by charges like registration, amenity, medical and activity fees.
In 2010, a study backed by the World Bank and the government recommended that public universities double their fees and increase interest paid on Helb loans. But student unions opposed the review.
Public universities have come under financial strain in recent years as a result of rapid expansion amid the dip in student enrolment, lower State funding and mismanagement.
They are expected to undergo reforms to cut their costs and make them financially viable.
Data from the Ministry of Education show the institutions are struggling to honour obligations such as payroll taxes, retirement benefits and insurance premiums for employees.
The universities have also failed to remit employee dues amounting to Sh34 billion, underlining the deepening cash flow crisis.
The vice-chancellors also revealed that they owe suppliers in excess of Sh68 billion. In 2017, government funding to universities shifted to the differentiated unit cost (DUC) model that pegged allocation of budgets on the number of undergraduate students registered and courses they take.
The liberal arts courses were offered less allocation compared to specialised degrees like engineering and medicine.
Before the DUC, each academic programme was allocated a flat rate of Sh120,000 per year per student.
With the DUC, the plan is to have the government contribute 80 percent funding per student, while the institutions and students cater for the remaining 20 percent equitably.
Data from UFB shows that capitation or allocation for government-sponsored students has fallen to 48 percent, leaving the universities with a funding gap of Sh68.35 billion as at June last year.
In recent years, a number of universities have had to scrap some courses and close satellite campuses to cut cost of operations.
Kenyatta University dipped into a Sh1.3 billion deficit in the year to June last year, forcing the institution to rely on short-term loans to finance its operations.
The Auditor-General said the university was operating under financial difficulties and relying on costly borrowings, which may further worsen the liquidity problem.
The University of Nairobi’s financial deficit at the end of the year to June 2020 widened by Sh330 million to Sh1.62 billion, underlining the cash flow problems at the institution that is now running a negative capital position.
The Auditor-General said the university was operating under financial difficulties and was unlikely to meet its financial obligations as and when they fall due.