Govt Reveals Changes to University & TVET Funding in New Higher Education Bill
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The Ministry of Education has unveiled a proposed higher education funding model after President William Ruto promised free education to students admitted to public universities and Technical and Vocational Education and Training (TVETS).
The proposal bill is contained in the Tertiary Education Funding Review, which is currently before Parliament and seeks to restructure how higher education is financed and how graduates repay government support after completing their studies.
Under the proposed bill, a majority of government-sponsored students will receive loans, while scholarships will be reserved for top-performing students and those from vulnerable families
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The Ministry of Education stated that graduates will begin repaying the loans after securing employment, with the reforms aimed at creating a more sustainable financing model for higher education.
Additionally, students who obtain formal employment will be required to notify the relevant authority after starting work to facilitate loan repayments, as those in informal sectors sign repayment agreements outlining how and when they will settle their loans.
“We are revamping the legal framework to create a repayment model. We propose a single repayment authority, which will consolidate repayment avenues and improve data management by creating a centralized database,”
The Ministry of Education further stated that the review proposes establishing a single authority to oversee the disbursement and recovery of higher education funds.
Therefore, the Higher Education Loans Board (HELB), the Universities Fund, and the Technical and Vocational Education and Training Funding Board (TVETFB) will be dissolved and replaced by a single institution to be known as the Tertiary Education Funding Authority (TEFA).
According to the ministry, the authority would merge existing funding streams and repayment channels into a single system, enabling better coordination and improved record management.
The proposed body would also be tasked with mobilising additional resources through education bonds, money markets and other financing options to support future university and TVET students.
“We have €56.7 million allocated by this institution to help. The University fund has €30.9 million, and TVET has been allocated €9.2 million. These funds are supported by different institutions, and we are working to bring them together and use the energy of this money to improve the fund,” the Ministry of Education stated.
Measures Government Aims to Use To Recover Student Loans
Meanwhile, to improve loan recoveries, the proposed legislation will require employers to deduct and remit repayments for graduates in formal employment.
The proposed bill states that employers who fail to comply with the remittance requirements could face penalties under the proposed law.
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Furthermore, the bill review also recommends strengthening legal mechanisms to recover outstanding loans from beneficiaries who default on their repayment obligations.
Besides student loans, the proposed reforms introduce a savings programme that would allow parents to save for their children’s university education before enrolment.
The review also proposes tax incentives to encourage corporate participation in financing higher education. Additionally, loan deductions would be capped at less than 25% of a beneficiary’s income to protect borrowers.
“To ensure borrower security, the University has proposed reducing University taxes to less than 25% of beneficiaries’ income. The fund aims to integrate resources and pool cash flows for a sustainable financing mix. We will have a bond system raised through the money markets,” the Ministry of Education stated.
The proposals were presented by Education Cabinet Secretary Julius Ogamba and HELB CEO Geoffrey Monari before the National Assembly Departmental Committee on Education.
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A photo showing the committee for the proposed bill on education funding. Photo/ parliament