Mounting Debt Threatens Sector's Stability

NAIROBI, Kenya – A severe financial crisis is gripping Kenya's private universities, which are demanding an immediate government settlement of KES 58.8 billion in unpaid tuition fees for government-sponsored students. The debt, which has accumulated over eight academic years from 2016/2017 to 2023/2024, has pushed many institutions into financial distress, jeopardizing their operations and the quality of education for tens of thousands of students.

Appearing before the National Assembly's Departmental Committee on Education on Tuesday, November 18, 2025, the Kenya Association of Private Universities (KAPU) detailed the dire situation. "The delayed disbursement of funds has forced most private universities to eat into their reserves to finance the education of government-placed students. This has financially crippled our institutions," Prof. Stephen Mbugua Ngari, the KAPU chairperson, stated to the committee. "This is not just a financial issue—it threatens the sustainability of private higher education in Kenya."

Origins of the Crisis: A Policy Shift

The crisis stems from a 2016 government policy that mandated the Kenya Universities and Colleges Central Placement Service (KUCCPS) to place government-sponsored students in private universities. This initiative was designed to increase access to higher education for qualified students who could not be accommodated in public institutions. Under the Differentiated Unit Cost (DUC) model, the government committed to covering 80 percent of tuition costs for these students, with parents or guardians paying the remainder.

However, KAPU asserts that the government has consistently failed to meet its financial obligations, leading to the staggering debt. This has left universities to cover the shortfall, leading to significant operational challenges. Prior to 2016, these institutions were financially stable as they primarily admitted self-sponsored students directly.

Widespread Impact Across Institutions

The financial strain is widespread, affecting some of the country's most prominent private institutions. According to data presented by KAPU, the outstanding amounts are substantial: Mount Kenya University is owed the highest sum at KES 12.9 billion, followed by Kabarak University at KES 6.8 billion, KCA University at KES 6.67 billion, and the Catholic University of Eastern Africa (CUEA) at KES 4.3 billion.

The consequences of the prolonged non-payment include difficulties in meeting basic operational costs, paying staff salaries, and investing in necessary infrastructure and academic resources. Some universities have reportedly been forced to take out loans to bridge the financial gaps created by the delayed government disbursements.

A Broader Sector-Wide Funding Problem

The financial distress in private universities mirrors a systemic funding problem across Kenya's entire higher education landscape. Public universities are also grappling with enormous debts, with their pending bills reported to have reached KES 85 billion as of July 2025. This indicates a deeper crisis that could impact Kenya's long-term capacity to develop the skilled human capital essential for economic growth.

Data from the Universities Fund reveals a worrying trend of declining financial support for students in private universities. While funding increased between 2019 and 2022, it dropped sharply from KES 3.175 billion in the 2022/2023 academic year to just KES 575 million for 2024/2025. The number of government-funded students in these institutions has also fallen from a peak of 89,664 to 59,514 over the same period.

Parliamentary Scrutiny and Calls for Accountability

The matter has drawn the attention of Parliament, with the education committee questioning the accuracy of the student enrollment data provided by the universities. Tinderet MP Julius Melly, the committee's chairperson, has urged KAPU to collaborate with the Ministry of Education and the Commission for University Education (CUE) to validate the figures. Meanwhile, the Ministry of Education has remained largely silent on the issue, though it has acknowledged that the claim has been forwarded to the National Treasury's Pending Bills Committee for verification. This verification process means the universities may have to wait longer for the funds. The situation is further complicated by past audit queries from the Auditor-General regarding the disbursement of funds to students not placed by KUCCPS or those who had overstayed their course duration, raising questions of accountability.

As universities await a resolution, the future of Kenya's private higher education sector hangs in the balance. Stakeholders insist that the settlement of the KES 58.8 billion debt is not merely a financial transaction but a critical step to ensure the survival and sustainability of institutions that play a vital role in the country's educational ecosystem.