The Higher Education Loans Board (Helb) needs an additional Sh20 billion to fund students under the new funding formula for universities.
The new model to be applied to the new cohort of students joining universities and technical and vocational education and training (TVET) institutions in September combines scholarships, loans and household contributions on a graduated scale.
Under the model, institutions of higher learning will be financed through scholarships at 80 percent and through loans at 20 percent.
Helb will apportion loans to government-sponsored students based on their levels of need classified into four— vulnerable, extremely needy, needy and less needy.
“All that money will find itself to the university through payment of the actual cost of the programme a student enrols for which is unlike what was the case in the previous model where courses were under-costed,” Helb chief executive Charles Ringera told Parliament during consideration of the 2023/24 budget estimates.
The new funding model will use a Means Testing Instrument (MTI) to scientifically determine the need levels of students.
The MTI, which is linked to databases including the Kenya Revenue Authority, and the National Health Insurance, now includes the Kenya National Bureau of Statistics data.
Mr Ringera said MTI can determine the vulnerability of a child by about 98 percent and this is corroborated through a validation process with local administrators and religious groups.
In the current financial year, the agency was allocated Sh14.8 billion to finance students based on their economic backgrounds, where successful loan applicants got between Sh35,000 and Sh60,000 per year.
Under the Differentiated Unit Cost model that is being phased out, of the total loan disbursed, Sh8,000 was sent directly to the university as tuition fees and the balance to the beneficiary’s bank account in two equal tranches covering the first and second semesters.
“Under the new model, we have ring-fenced some Sh4 billion for the upkeep of the students at an average of Sh26,000 for the 116,000 students that we will be funding that will go through the MTI,” he said.
Helb has over the years struggled to meet the rising demand for loans, amid a growing number of government-sponsored students in public universities, limited resources and a growing list of defaulters.
The number of candidates who made the minimum university entry grade in the 2022 Kenya Certificate of Secondary Education (KCSE) examination rose by 19 percent to 173,345 compared to 145,776 recorded the previous year.
Over the past five years, nearly all students who scored C+ and above were admitted to the regular university programmes, meaning they qualify for Helb loans.