University funding: From the glory days of Boom to the complicated era of HELB and bands

BIG 3 REGIONAL UNIVERSITIES 

As the 60s rolled out, local universities were established and the students going to study at these universities had to go to a tertiary institution where his/her chosen course was undertaken. 

Generally, Engineering degree courses were reserved for the University of Nairobi; Medicine and related degree courses were offered by Makerere University while Dar es Salaam University offered the Law degree and allied art courses under the East Africa Community umbrella. 

In the whole region there were only three universities, Makerere University, Dar es Salaam University and the University of Nairobi.

The first students going through university education especially at the University of Nairobi were quite few and in return lived the good life without the baggage of scholarship financing, upkeep loans or food hassles to worry about. The first few lucky students lived a rent free and care free life up until the early seventies.

THE BOOM ERA 

In 1972, university students started receiving higher education loans to cater for their tuition, upkeep and food in pursuit of studies at the university. The Higher Education Loans department was set up to streamline funding for higher education students. 

Under this model, government would pay the funds directly to the universities while the loans would get disbursed through local banks, from where each student accessed their bank accounts. The bigger chunk was sent directly to the University as capitation fee. 

These formed the heady days at the university when students would paint towns red when they withdrew their upkeep cash, famously known as “Boom.” In these enviable days, public university students’ cafeteria was awash with good sumptuous food. So sumptuous was the diet that students would at times took to the streets to protest a delicacy like chapati missing in their menu. 

The early 90’s saw the emergence of cost cutting measures meted out by the universities and by extension, the government. It was dubbed the Differentiated Unit Cost (DUC) model. University students, upon receiving disbursed loans, were required to pay for food and accommodation while the government sent capitation funds of around Ksh.80, 000 per student directly to the universities. 

FORMATION OF HELB

The Higher Education Loans Board (HELB) was set up in 1995 to compliment university funding by offering upkeep loans to needy students. At around this time, the scheduled university tuition fees stood at Ksh.16, 000. HELB catered for half of it by disbursing Ksh.8, 000 for each student. 

Under the Differentiated Unit Cost (DUC) model of funding, there was rampant cheating even by the universities themselves against the government funding agencies. For instance, some universities indicated they had more students, as per Joint Admissions Board (JAB) figures yet in truth not all the students directed to join a given university report. 

By indicating a higher number of students, the universities would receive more capitation funding. Even though many times, the promised funding was always short of the expected amount budgeted.

KIBAKI’S MODULE TWO FUNDING PROGRAM

At the advent of late President Mwai Kibaki’s administration in 2003, the government introduced a funding program dubbed the “Module Two program” or the “Parallel Degree program” as it came to be popularly known.

This program gave life and considerable funding to the hitherto sleepy and poorly funded public institutions of higher learning. Primarily, the parallel degree program opened a window, for public universities, to offer degree programs to private students concurrently with the government sponsored students. 

However, the parallel students were paying a higher premium as compared to their government sponsored compatriots. This program leveraged on getting ‘wealthier’ students to pay more and its Achilles heel was in exacerbating the grim schism between the ‘haves and have nots’. The wealthier a student, the more the opportunities abound. 

The other challenge it faced was lack of integrity in managing the cash generated. The program also led to glaring inequities in access to higher education, as wealthier students had greater opportunities, leaving economically disadvantaged students to compete for fewer government-sponsored slots.

RUTO’S NEW 5-BAND MODEL

In 2023, the government increased budgetary allocation to the higher education sector to facilitate learning under the new 5-band university funding model. The new model delinks student placement with funding, thus requiring students to submit applications to the Higher Education Loans Board (HELB) and Universities Fund (UF) for loans and scholarships, respectively. 

Funding of students now combines scholarships, loans and household contributions on a graduated scale that is scientifically determined by a means-testing instrument. The means testing instrument assesses eligible applying students into 5-bands. It has completely replaced the Differentiated Unit Cost (DUC) model of funding.

President William Ruto, in drumming up support for the model, said that eligible students will get between Ksh.40,000 and Ksh.60,000 in upkeep based on their financial needs. For instance, the most needy students will be placed in band one to access 70 per cent scholarship, 25 percent loan, 5 percent household contribution and Ksh.60,000 for upkeep. The new model demands that only those placed to public universities by KUCCPS are eligible for scholarships and loans, while those in private entities only qualify for HELB loans.

Under the new model, universities and TVET institutions will no longer receive block funding in the form of capitation. Instead, funding for students will be provided through scholarships, loans, and household contributions. 

The government has set out five bands that classify students based on their households’ ability to afford fees, with most financially disadvantaged receiving greater government sponsorship and loans.

• Band One will include students from households earning up to Ksh. 5,995 and government will pay 70% of fees and loan them 25% – totaling to 95% provision.
• Band Two will include students from families earning up to Ksh. 23,670 and will receive 90% of government aid – 60% scholarship and 30% loaning. 
• Band Three’s will include students from households earning up to Ksh. 70,000 and will receive 80% of government funding – with 50% scholarship and 30% loans. 
• Band Four will include students from households earning up to Ksh. 120,000 and they will receive 40% as government sponsorship and 30% as loans. 
• Band five, will include students from households earning more than Ksh.120,000 and they will only receive 20% of government sponsorship and 30% loans.

The new 5-band funding model is scheduled to ensure timely disbursement of funds to students, with delays cited as a major problem in the previous model.

DESOLATE IN THE 5-BAND MODEL 

The new 5-Band funding model has raised questions about how the government can effectively assess each household income as well as their level of need. The system is complex, as households earning more than Ksh. 120,000 might still be regarded as needy if a substantial segment of their income is allocated to other basic or important expenses. There are many families with many dependents despite having higher incomes and the government has not come clear on this.

The 5-band funding model does not analyze income stability, mobility to either lower or higher levels than the initial amount stated and how it will treat such movement. A number of observers have also queried why people they know have been placed in incorrect income bands which puts to question the consistency or lack thereof of the testing instrument. 

There is also valid apprehension that the new 5-band model will be easily corrupted and students who do not need much help may bribe their way into lower bands to secure higher government sponsorship. This has remained, over the years, a widespread reality in many equity-based programs and the new 5-band university funding model shows a weakness for this vice.

All universities were told to cost their courses which they did and posted to the Kenya Universities and Colleges Central Placement Service (KUCCPS) without having a wider stakeholder engagement. To date, very few people know how the exercise was carried out and how the figures, were arrived at. This needs to be reassessed with the view towards having a wide stakeholder engagement and for legitimacy.

On 14th August, President Ruto directed all Public Universities to recall admission letters for students set to join the higher learning institutions and issue new calling letters sensitive to the financial situation of parents countrywide. Such populist steps might make administration of the new fund tough to roll out.

Determining the income level of a given family is a gigantic task owing to the capacity of the implementing agencies. There is a lot of reliance, with an assessment of the relevant Identification Number (ID) being examined by the National Registrations of Persons office, the Kenya Revenue Authority (KRA) and even the cross checking with the Kenya National Bureau of Statistics (KNBS) data on the poverty index to ascertain where given applying students come from. But ultimately, the government has to rely on the self-assessment of students to place them into specific bands.

The collapse of education is the collapse of the nation; ignorance and suffering is rife in both the lives of an uneducated and a dishonest population.