Mounting Sh60billion debt puts state, private universities on collision course
President William Ruto has pledged Sh2 billion to Kenya Methodist University (KeMU) as part of efforts to ease mounting arrears owed to private universities, with the total government debt now standing at an estimated Sh60 billion.
Speaking at State House yesterday during a meeting with leaders of the Methodist Church, which sponsors KeMU, Ruto acknowledged the financial strain facing private institutions and committed to release Sh2 billion out of the Sh5 billion owed to the university.
The payment forms part of a much larger outstanding balance owed to 32 private universities under a now-discontinued government sponsorship programme.
The controversial programme was introduced in the wake of sweeping reforms by the Kenya National Examinations Council (KNEC) following the 2015 Kenya Certificate of Secondary Education (KCSE) exams. That year, 5,101 results were annulled over cheating.
In 2016, strict anti-cheating measures spearheaded by then Education Cabinet Secretary Fred Matiang’i and then-KNEC Chair George Magoha led to a dramatic drop in university qualifiers—from 165,766 in 2015 to 70,073 in 2016.
With fewer students eligible for placement in public universities, private institutions faced a looming crisis of empty lecture halls and financial instability.
To cushion them from collapse, the government placed a portion of state-sponsored students in private universities and undertook to fund their tuition through the placement system managed by Kenya Universities and Colleges Central Placement Service (KUCCPS).
The arrangement ran until the 2022/2023 financial year, when new placements to private institutions were halted. At that point, the government owed Sh45 billion.
However, as remaining student cohorts continued their studies, the arrears ballooned to Sh60 billion.
Universities Fund CEO Dr Edwin Wanyonyi said the debt grew as students already admitted under the four-year programmes progressed to completion.
“The last cohort will complete this year, though some degree courses run longer,” he noted.
Mount Kenya University tops the list of creditors, with Sh11.6 billion owed. It is followed by KCA University (Sh6.6 billion), Kabarak University (Sh6.4 billion), and KeMU (Sh5 billion). Several other faith-based and private institutions are collectively owed billions more.
Professor Simon Gicharu, founder of Mount Kenya University, said institutions chose not to send students home despite the funding freeze, absorbing operational pressures in the hope of eventual payment.
Higher Education Principal Secretary Beatrice Inyangala has since told MPs that the Association of Private Universities has issued a notice of intention to sue, arguing that while students were duly placed by KUCCPS, the State failed to honour its financial commitments—setting the stage for a potentially costly legal showdown.
