State owes private universities Sh60bn in unpaid fees since 2016, PS Inyangala tells MPs

Higher Education Principal Secretary Beatrice Inyangala appearing before the National Assembly Committee on Education, March 18, 2026./SCREENGRAB

The Ministry of Education, through the State Department for Higher Education, owes 32 private universities more than Sh60 billion in accrued capitation funds for government-sponsored students placed in the institutions since 2016.

The placement of government-sponsored students into private universities was introduced during the 2016–17 financial year, as the state sought to utilise existing capacity in private institutions to manage surging university enrolment that had overwhelmed public universities.

Eligible students placed in these institutions by the Kenya Universities and Colleges Central Placement Service (KUCCPS) were funded at a flat rate of Sh70,000 under the Differentiated Unit Cost (DUC) model.

The arrangement was discontinued in 2023 following the introduction of the student-centred funding model, which reserves government scholarships and loans strictly for students placed in public universities.

The number of state-sponsored students placed in private universities rose sharply over the years, from 6,208 in the 2016–17 financial year to 77,761 in 2022–23, when the arrangement was last implemented.

In its 2025–26 Supplementary Budget Estimates I, the State Department for Higher Education indicated that cumulative financing for private universities between the 2016–17 and 2024–25 financial years stood at Sh77.24 billion.

“Against this requirement, a total of Sh18.99 billion had been disbursed, resulting in an overall validated funding deficit of Sh60.28 billion. This substantial shortfall reflects the cumulative effect of persistent under-allocation relative to approved DUC entitlements over the financial years,” State Department for Higher Education PS Beatrice Inyangala told the Departmental Committee on Education.

In its brief supporting the supplementary budget proposals, the State Department said Mount Kenya University is owed the largest amount at Sh11.6 billion, having received only Sh4.9 billion out of a total bill of Sh16.1 billion.

KCA University and Kabarak University follow, with outstanding balances of Sh6.6 billion and Sh6.4 billion, respectively over the period under review.

Kenya Methodist University is owed Sh5 billion, the Catholic University of East Africa (CUEA) Sh4.1 billion, while Zetech University and the University of Eastern Africa, Baraton are each owed Sh3.7 billion.

St Paul’s University and the Presbyterian University of East Africa are each owed Sh2.1 billion, while Africa Nazarene University, Daystar University, Lukenya University, Pioneer International University and Uzima University College are each owed more than Sh1 billion.

Inyangala said Sh50 billion has so far been disbursed under the new funding model from the Exchequer, universities’ own-source revenue and support from development partners.

She added that the State Department needs to monitor and evaluate the new student-centred funding model to establish its operational efficiency as compared to the DUC framework.

"There is also a need to track and report progress on the implementation of policies, programmes and projects across universities," she added.

“This necessitates additional funding of Sh50 million to carry out the exercise in the current financial year,” she said.