New university funding model is worth a try
The government has finally released a funding proposal which, hopefully, will start rectifying the very significant cash crunch that continues to threaten the existence of those institutions of higher learning.
Like in any well-meaning initiative, the success or failure of the latest proposal will depend on how effectively it is implemented. Experience elsewhere does not give much hope, but there is always the exception.
The key difference in the proposed model from the existing arrangement is that it shifts the basis of funds disbursement from the differentiated unit cost to one that directly funds students based on their socio-economic status.
A four-tier system based on household income has been established to differentiate the students' level of need: vulnerable, extremely needy, needy and less needy.
Apart from household income, other criteria to be considered will be the choice of the programme, affirmative performance and government priority areas. The intention here is to signal a deliberate effort to prioritise programmes seen as key to achieving the government’s development priorities.
As universities and other relevant institutions prepare to apply this new model to the cohort of students that will join universities and vocational training institutions this year, the fundamental question remains whether it will actually disburse more funds to the universities. This is because universities have simply not been getting what they actually need under the differentiated unit cost.
Under that system, which will still apply for continuing students starting from those in the second year, universities requested funds based on the number of students that they had calculated on the unit cost of the courses that they were registered for.
For example, one university that had 25,000 students in 2022 requested a Sh5.4 billion capitation, being 80 per cent of the total cost of what they needed. The students were required to contribute 20 per cent, calculated at around Sh16,000 per student.
But because of insufficient funds for disbursement, it received only Sh2.8 billion, or 43 per cent of the 80 per cent requested. All public universities suffered this very significant haircut based on their capitation request.
This has been going on for a while now, triggering a perpetual cash shortfall. Does the new model solve this cash shortfall problem? Not quite, unless a number of key issues are addressed.
Extremely needy
The government is only fully funding 29 per cent of the 173,127 candidates joining the university and the 145,325 joining TVETs. These students are the ones categorised as vulnerable and extremely needy. Those not so classified will only be funded partly, with a significant component of the fees funded through loans.
For example, a student falling under the needy category will be funded up to 53 per cent, with loans taking up 40 per cent and the household directly contributing seven per cent. The loan component will be even higher for students classified as less needy.
With the experience from the challenges confronting graduates and families repaying HELB loans, it would be foolhardy to expect that repayment here will be smooth sailing. Depending on the course being undertaken, the loan and direct contribution component will add up to very significant amounts annually and it could prove to be a challenge to keep some of the students in universities and colleges.
Other critical factors must come into play too if the new funding model is to be successful. First, in the face of all the competing challenges that the government must find money to fund, it must fully allocate the Sh84.6 billion it has earmarked for university education this year, and whatever allocations in subsequent years. We recognise that only a portion of this will be used on the first years of this academic year as the continuing students will be funded under the existing capitation model that, in all certainty, will continue to be underfunded.
The government plans to integrate all existing funding schemes — scholarships and bursaries — under a single authority for it to apply one set of eligibility criteria across the board. This effort calls for a high level of efficiency that is extremely difficult to find in the civil service. Almost inevitably, efforts to undermine the system through corruption that may well see needy students miss out to those that can pay will come into play.
Even as it grapples to deal with the fearsome devil in the details, the real beast is the existing debt that universities will continue carrying. Until and unless they are addressed, the new model will be a temporary panacea. But it is a beginning nonetheless and it will be interesting to see how it evolves. BY DAILY NATION
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