In the latest attempt to protect the institutions, the Vice chancellors has again considered raising tuition fees in the country’s universities.
In a memo issued by the Ministry of Education, university leaders were urged to review higher entry fees in the coming years.
After the vice chancellor’s meeting on September 23, explored policy options to ensure the financial stability of the university, because some rely on short-term loans to finance their operations.
Officials had earlier proposed to increase tuition fees from the current Sh16,000 to Sh48,000 to ease the cash crunch affecting the provision of services to new students.
The tripling of fees would be the first major shock to university fees since the end of free university education in 1991 and the introduction of the Higher Education Loans Agency (HELB) in 1995.
The review comes at a time when enrollment in self-funded programs has been drastically reduced after universities opted to fully fund students who scored the mandatory C+ grade in the Kenya Certificate of Secondary Education (KCSE) examination.
Students enrolled in parallel degree programs have generated billions in revenue for institutions over the years.
Courses and university fees must be repaid and the State and University Finance Board (UFB) has been asked to approve the revision of tuition fees.
The proposal by the VC to introduce additional fees for new students entering universities from the middle of next year to ease student opposition.
Of the current average annual fee of Sh266,000, the tuition fee, which has remained unchanged since 1995, receives Sh16,000, the student pays Sh8,000 and the other half is paid by Helb. The rest is charged as registration, convenience, medical and activity fees.
In 2010, a study supported by the World Bank and the government recommended that public universities double their fees and increase the interest paid on Helb loans. But the student union rejected the move.
Public universities have experienced financial difficulties in recent years due to declining student numbers, poor government funding and declining governance.
Data from the Ministry of Education and Culture shows that institutions are struggling to meet obligations such as salaries, pension payments and insurance payments for employees.
Data from the Ministry of Education and Culture shows that institutions are struggling to meet obligations such as salaries, pension payments and insurance payments for employees.
Universities also failed to pay $34 billion in employee benefits, pointing to a deepening cash flow crisis.
The VC revealed that they owe over Sh68 billion to suppliers. In 2017, state funding for universities switched to a unit cost model, which provides a budget for the number of undergraduate students enrolled and courses taken.
Liberal arts courses are underrepresented compared to specialized degrees such as engineering and medicine.
Before DUC, each curriculum was allocated an amount equal to Sh120,000 per student per year.
With DUC, the government plans to fund 80 percent per student, with institutions and students providing the remaining 20 percent equally.
Figures from the UFB show that the share, or share, for government-funded students has dropped to 48 percent, leaving universities with a gap of $68.65 billion in June last year.
In recent years, some universities have had to close some courses and close satellite campuses to reduce operating costs.
Kenyatta University had a deficit of Sh1.3 billion by 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 was relying on expensive debt, which could cause its liquidity problems.
The University of Nairobi’s financial deficit increased by Sh330 million to Sh1.62 billion for the year to June 2020, highlighting cash flow problems at the institution, which currently maintains a negative equity position.
The auditor general said the university was running into financial difficulties and could not say if and when its financial obligations would be met.
