Economy

Taxpayers save Sh2.2bn after deregistration of overstay varsity students

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University of Nairobi main entrance. FILE PHOTO | NMG

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Summary

  • More than 12,000 students who failed to finish their courses within the stipulated time in public universities have lost State funding in a move that will save taxpayers Sh2.2 billion.
  • The University Funding Board (UFB) said the affected students would now have to foot their own tuition fees should their respective institutions allow them to carry on with studies.

More than 12,000 students who failed to finish their courses within the stipulated time in public universities have lost State funding in a move that will save taxpayers Sh2.2 billion.

The University Funding Board (UFB) said the affected students would now have to foot their own tuition fees should their respective institutions allow them to carry on with studies.

The government currently pays up to 80 percent of tuition fees for the students it sponsors in public universities.

“In this financial year we stopped catering for 12,354 university students on establishing they had overstayed at the institutions and this has saved Sh2.2 billion,” Geoffrey Monari, the chief executive officer of the UFB, said.

Public universities early this year kicked off a purge on students who had surpassed their stipulated training periods after the UFB raised a red flag on growing financial strains.

Many students drop out but continue seeking funding from the government.

The University of Nairobi (UoN) on March 22 started the crackdown on students that had stayed at the institution for a period longer than their course requirement.

2nd lead

They include those whose studentship has expired, those on expulsion, those with unexplained failure to transit to the subsequent level and those that interrupted their study by deferment or suspension.

An average undergraduate course takes four years with the exception of others such as architecture and medicine which extend up to seven years.

The government in 2017 introduced a new formula for funding public universities, the differentiated unit cost (DUC), amid cash flow challenges.

Under the model, the government caters to 80 percent of the unit cost of a course while the remaining 20 percent is borne by the institutions.

UFB strictly uses students’ enrolment numbers and the courses they take to allocate funds, a departure from the previous model where the government paid a flat rate of Sh70,000 per academic programme per student.

Under DUC, universities offering courses such as medicine, dentistry, engineering, architecture and law receive more cash for tuition compared with those largely offering arts and humanities.

University education in Kenya used to be free and the full cost was borne by the government until the introduction of cost sharing in public varsities in 1991 under a World Bank-backed plan.

It resulted in regular students paying tuition fees, accommodation, meals and personal upkeep after the government withdrew universal financial support to the universities. But the government offers grants to universities based on student population.

In 1998, the universities started admitting self-sponsored students to their parallel programmes where fees is pegged on the cost of a course. Charges range from Sh150,000 to Sh500,000 a year.

The self-sponsored students generated billions for the universities, easing the push to review fees for regular students.

Funding for universities has, however, been hit hard by the sharp decline of students enrolling for the parallel degree programme courses over the past three years that generated billions for the institutions.

This has piled pressure on the institutions of higher learning to seek additional funding, with the review of tuition fees taking centre stage.

Vice-chancellors have been pushing for the tripling of tuition charges to Sh48,000 from the current Sh16,000 annually amid opposition from students.

If their proposal is approved, it will mark the first major shake-up of university fees since the end of free university education in 1991 and introduction of the students’ loans scheme – the Higher Education Loans Board (Helb) -- in 1995.

The institutions’ financial woes have been worsened by the Covid-19 pandemic which led to their closure to combat its spread.

Public universities have failed to remit employee dues amounting to Sh34 billion, underlining the deepening cash flow crisis.

The universities are struggling to honour obligations such as payroll taxes, retirement benefits and insurance premiums for employees, according to a report submitted to lawmakers by the Ministry of Education.

The public universities have outstanding remittances to the Kenya Revenue Authority, the National Health Insurance Fund (NHIF), the National Social Securities Fund (NSSF), pension schemes, insurance companies and saccos.

Remittance of statutory, loan and members’ deductions to saccos and banks are mandatory employer obligations.