From students’ scholarships to loans: Is Kenya making the right move?

Kenya is set to revolutionize the way it funds students in public universities and TVET institutions, proposing to replace scholarships, HELB loans and household contributions with a single, fully loan-based system. This proposal, outlined in the Tertiary Education Placement and Funding Bill, would see every student receiving full government funding that must be repaid after graduation.

President William Ruto believes this model will ensure access to higher education for all qualified students, regardless of their family background. The new model is designed to improve the sustainability of higher education funding as student numbers grow. It involves creating a Tertiary Education Funding Authority, bringing together key entities like HELB, the Universities Fund, and the TVET Funding Board to access diverse financing sources.

The loan-based model is expected to create a revolving fund as graduates repay their loans, which can then be used to support future students. However, there are concerns that this could turn previously non-repayable funding into debt, particularly burdening students from low-income households who might graduate with higher loan balances.

The repayment structure also poses challenges for graduates in the informal sector or those who take time to secure employment, as deductions could consume a significant portion of their earnings. The Bill is still under review by Parliament, and its final form could alter before it becomes law. Regardless, the shift from grants to a repayment-based financing model could significantly impact students and the education system in Kenya.