Varsities face shutdown as debt hits Sh100billion

Public universities across Kenya are facing a deepening financial crisis, with mounting debts now exceeding Sh100 billion and raising fears over the sustainability of higher education institutions.

At the same time, cracks are beginning to emerge in President William Ruto’s much-touted university funding model, raising concerns that it could slide into the same troubles that plagued its predecessor.

It has since emerged that the Ministry of Education is required Sh29.55billion to fully fund students under the model but the allocation fell significantly by half realising a Sh16.92billion budget.

Appearing before Parliament’s Education Committee, Higher Education Principal Secretary Beatrice Inyangala painted a grim picture of the sector, warning that the growing liabilities are choking universities and threatening their survival.

The disclosure prompted sharp reactions from MPs, who demanded clarity and urgent action from the Ministry of Education.

“Now you are arriving here with a figure of Sh60 billion when the owners are saying they are being owed 32. You are seeing why we are not happy with you. The pending bills thing, we are throwing it back to you. We want to resolve this, but you are making it murkier for us by giving us incorrect figures,” Julius Melly, chair of the National Assembly Departmental Education Committee stated.

The State Department for Higher Education revealed a significant funding shortfall that has already disrupted learning for thousands of students.

To cushion institutions and maintain operations until the next financial year, the ministry is seeking Parliament’s approval for an additional Sh14.3 billion through a supplementary budget.

At the centre of the crisis is the Higher Education Loans Board (HELB), which is grappling with a Sh43.6 billion budget deficit across the current and upcoming financial years.

As a result, more than 450,000 students have been left without access to crucial financial support. At the same time, universities require nearly Sh4 billion to settle arrears arising from lecturers’ collective bargaining agreements.

However, beyond the funding gap, MPs raised concerns over discrepancies in reported pending bills.

Public universities’ unpaid obligations are now estimated at nearly Sh100 billion as of the end of last year, while debts in private universities have doubled over the same period.

Education Committee Chair Julius Melly criticised inconsistencies in the figures presented by the ministry, expressing frustration over what he termed as conflicting data. Lawmakers warned that inaccurate reporting was complicating efforts to resolve the crisis.

A breakdown of the debt shows several major institutions bearing the heaviest burden.

Egerton University leads with Sh25.5 billion in unpaid bills, followed by University of Nairobi at Sh17 billion, Kenyatta University at Sh12.8 billion, and Moi University at Sh10.4 billion.

Lawmakers also questioned the rationale behind selective funding allocations, particularly after it emerged that one university received a ring-fenced Sh600 million despite the widespread financial distress across all 32 public universities.

Further scrutiny was directed at stalled development projects in several institutions, including campuses in Nairobi, Moi, Egerton, and Laikipia. MPs criticised the continued allocation of funds to new projects while existing ones remain incomplete, arguing that such decisions exacerbate inefficiencies and deny students essential services.

Suba South MP Clive Gesaro faulted the ministry for prioritising infrastructure projects over critical student support, noting that funding for HELB and scholarships remains inadequate.