Ruto administration faces education funding crisis

The education sector is facing a myriad of challenges in Kenya with recent revelations of underfunding and delays in disbursements for both higher learning and basic education.

Higher education faces a critical funding crisis as of 2026, characterized by a Sh260 billion shortfall for the 2026/2027 financial year.

Despite the new student-centered Variable Scholarship and Loan Funding (VSLF) model introduced by President William Ruto in 2023, public universities are drowning in debt.

At least 23 universities risk insolvency and has accumulated billions in pending bills.

Public universities are struggling with unpaid bills totalling Sh85.28 billion as of January 31, 2026 with major institutions like the University of Nairobi, Technical University of Kenya, and Kenyatta University holding some of the highest debts.

The "new" funding model introduced in 2023 faces criticism as it shifts from block grants to student-centered funding.

Critics argue the Means Testing Instrument (MTI) used for categorizing needy students is flawed, potentially limiting access for poor students.

Despite scholarships and loans, households still struggle with the high cost of living and additional expenses like accommodation, food, and transport, which are not fully covered.

Delayed funding from the government hinders university operations, causing persistent delays in paying staff salaries, statutory deductions (taxes/pensions), and routine maintenance.

Public universities have seen an 81.6% increase in state-sponsored students while funding has not kept pace, leading to strained facilities.

Just last month, it was reported that funding for 379,858 university and TVET students through the Higher Education Loans Board (Helb) hangs in the balance due to a Sh32.9 billion deficit in the current education calendar.

The State Department for Higher Education says Helb was allocated Sh41.5 billion for the 2025–26 financial year against a requirement of Sh74.4 billion to support 1,104,157 university and TVET students.

Higher Education Principal Secretary Beatrice Inyangala said the allocated amount can only support 650,267 students, leaving 453,889 eligible applicants without support.

“The proposed supplementary budget allocation of Sh4.1 billion will support 74,031 students at an average of Sh55,639 per student. This will leave 379,858 students not funded,” Inyangala told the committee chaired by Tinderet MP Julius Melly when she appeared before MPs.

Data from the ministry shows that 575,663 university students applied for loans in the 2025–26 financial year, but only 358,832 applications were approved, leaving 216,831 students locked out.

Out of 528,493 TVET applicants, 291,435 received funding, while 237,058 learners missed out.

To fully fund all university students, Helb requires Sh55.1 billion, but only Sh30.9 billion was allocated, leaving a deficit of Sh24.1 billion.

Resources needed for 2026-27 total Sh47.36 billion, while only Sh17.92 billion has been allocated, leaving a gap of Sh29.44 billion.

By 2026-27, cumulative scholarship deficits could hit Sh51.7 billion, threatening the sustainability of the model introduced in 2023 to improve equity.

 The Kenya Association of Private Universities (KAPU) has also threatened legal action over unpaid fees for students placed through Kenya Universities and Colleges Central Placement Service (KUCCPS), amounting to Sh45.77 billion.

And last week, the Ministry of Education and Treasury were under the spot with revelations of underfunding and delays in disbursement of capitation monies that has threatened the free primary and secondary education in the country.

Despite the Constitution under Article 53 making basic education free and compulsory, MPs asked the ministry to acknowledge that the government had failed on this mandate and was instead offering subsidized education.  

This after Basic Education Julius Bitok revealed that although the government policy sets capitation at Sh22,044 per secondary school learner, schools have instead been receiving an average of Sh15,844.38, leaving a significant deficit that has strained operations in public schools.

He disclosed that between the 2020/21 and 2023/24 financial years, underfunding across secondary schools alone amounted to more than Sh71 billion, while Junior Secondary Schools recorded a deficit of Sh31.9 billion. Primary schools and special needs education also faced significant shortfalls.

At secondary level, he said underfunding rose to about Sh76.9 billion, with the funding gap widening as enrolment increased from 3.3 million learners in 2020/21 to over 4 million in 2023/24.

“Despite this, the approved budget increased only marginally, resulting in a growing deficit that reached more than Sh25.8 billion by 2023/24. The number of learners not provided for increased from 724,959 to 1,161,349,” he said.

“Who foots that particular deficit of capitation? You should make a policy directive that we are not having free education but subsidised education,” Funyula MP Wilberforce Oundo quipped.

Mathioya MP Edwin Mugo drew parallels with financial pressures in higher education, calling for a broader review of unpaid obligations in schools.

“We had an issue of pending bills in universities which made public institutions unsustainable. Can we have an analysis on the pending bills in secondary schools?” Mugo posed.

Lugari MP Nabii Nabwera argued that the value of capitation had significantly eroded over time due to inflation, saying the current funding levels were far below what was originally intended.

“The capitation is actually 12,000 and not 15,000 if we factor inflation because the value of money now and when the capitation was calculated is not the same,” Nabwera said.

Critics are saying some of the funding challenges are due to wrong priorities by the Ruto administration with Kirinyaga Woman Rep Njeri Maina questioning the allocation of billions to State House operations while the education sector faces persistent funding challenges.

“We have seen the State House budget they have spent is Sh89 billion in the last three years. We know that former president Uhuru Kenyatta spent about Sh100 billion in ten years. That means our president does not want to know whether children will go to school or not. He does not want to know if classrooms will be built,” Ms Maina argues.

KNBS Economic Survey of 2026 indicates that the total number of basic learning institutions increased from 129,463 in 2024 to 130,659 in 2025.

The number of pre-primary schools increased to 48,190 in 2025 from 47,760 in 2024. The number of primary schools increased to 39,339 in 2025 from 38,997 in 2024.

Junior schools increased from 31,951 in 2024 to 32,079 in 2025, while secondary schools increased by 2.8 per cent to 11,051 during the review period.

The number of primary public Teacher Training Colleges (TTCs) rose to 34 during the review period with the total number of pupils enrolled in pre- primary schools increasing to 3,121.4 thousand in 2025 from 2,914.4 thousand in 2024.

Total enrolment in primary and junior schools rose by 11.2 per cent to 11,935.7 thousand in 2025.

During the review period, the first full set of enrollment for all the three grades in junior school under the Competency Based Education (CBE) had 3,701.1 thousand learners.

As the 8:4:4 system is getting phased out, there were 3,338.8 thousand learners in secondary school comprising three classes (form 2, 3, and 4) in 2025.