- The state has unveiled reforms to abolish scholarships and replace them with loans for all students admitted to public universities.
- Graduates have been required to declare loan obligations to employers for salary deductions, while informal sector workers have been directed to sign repayment agreements with the Higher Education Loans Authority.
- The proposal has shifted away from the Student-Centred Funding Model, eliminating scholarships and consolidating financing streams under a single authority.
The government has unveiled sweeping reforms to higher education financing that would abolish scholarships and replace them with a fully loan-based system for students admitted to public universities.
The proposal is contained in the Tertiary Education Placement and Funding Bill, now before Parliament, which seeks to establish a unified framework for financing tertiary education. If passed, every student joining a public university would receive full government funding for their studies, but the entire amount would be issued as a loan to be repaid after graduation once the beneficiary secures employment.
The Bill outlines the creation of a single authority to manage university financing by consolidating existing streams into one system. Lawmakers have been told the move is intended to improve efficiency, strengthen accountability, and ensure long-term sustainability of higher education funding.
Under the proposed law, graduates who enter formal employment will be required to declare their loan obligations to employers immediately upon hiring, enabling automatic deductions from their salaries. Those working in the informal sector will instead sign repayment agreements with the Higher Education Loans Authority, specifying how and when they will settle their obligations.
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To protect borrowers, the legislation caps loan repayments at no more than 25 per cent of a graduate’s earnings. At the same time, the authority would be empowered to recover unpaid loans through civil proceedings, giving it legal grounds to pursue defaulters who fail to meet repayment obligations.
The reforms mark a sharp departure from the current Student-Centred Funding Model, under which students receive varying combinations of scholarships and loans depending on household income and financial need. The new approach would eliminate scholarships, shifting the burden entirely to loans repayable after graduation.
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The Bill has already been tabled before the National Assembly’s Departmental Committee on Education and will now proceed to debate by Members of Parliament. The outcome will determine whether the proposed loan-based model becomes law, reshaping how future generations of Kenyan students finance their university education.
By Jonathan Mwinzi
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