How Moi University’s crisis exposes Kenya’s broken new university funding model

Moi University's ongoing financial crisis is highlighting a key issue with Kenya's new university funding model. Despite the government's claims that the system promotes equity and sustainability, public universities continue to face debts, cash flow challenges, and pressure to cut wages. The planned layoffs of over 75 staff members at Moi University, alongside a reported Ksh9 billion debt crisis, raises the question of whether the new student-centered funding model is truly addressing the universities' financial struggles or merely shifting the burden to students, households, and university management.

The Student-Centred Funding Model, introduced by President William Ruto in May 2023, aims to move away from a system that provided funding largely based on the cost of educating students in different programs. Instead, funding is now determined by students' financial need, with support provided through scholarships, loans, and household contributions.

Students are evaluated using a Means Testing Instrument and placed in different funding bands based on their financial circumstances. The government maintains that this model makes the system fairer by ensuring that students from poorer households receive more support while those with greater financial capacity contribute more.

However, the situation at Moi University demonstrates a significant mismatch between student financing and institutional sustainability. Even with a large number of students receiving scholarships and loans, a university may still struggle to pay salaries, suppliers, statutory deductions, pensions, utilities, and other recurrent expenses.

The new funding model focuses funding on the individual student, but universities still have fixed obligations that must be met regardless of when the funding is received. This can lead to arrears and financial difficulties even when enrollment remains high.

The model has also spurred universities to seek alternative sources of revenue, but this raises the question of how realistic it is to expect institutions already burdened with historical debts to simultaneously become more commercially self-sufficient. Moi University's crisis underscores the disconnect between the student financing system and the actual cost of educating students and meeting their fixed obligations.

While the funding system may successfully identify needy students and allocate scholarships, universities still require sufficient and predictable resources to employ lecturers, maintain infrastructure, conduct research, and meet other essential expenses.

The debate around Kenya's university funding has largely focused on how students should receive financial support, with less attention given to how institutions can maintain financial stability. While the government acknowledges weaknesses in the old financing model, simply replacing institution-based funding with student-centered financing does not automatically solve the sector's structural problems.

Universities need predictable funding, realistic allocations that reflect the actual cost of programs, stronger financial oversight, and a clear mechanism for addressing historical debts. Moi University's predicament is not just about redundancies but a stress test of Kenya's broader higher education financing system. The real measure of the new model will be whether public universities can achieve financial stability to provide quality education without repeatedly facing debt, staff cuts, and government intervention.