The clock is ticking on President William Ruto’s plan to introduce a new system for funding higher education, with universities already preparing to receive thousands of first-year students before Parliament has approved the proposed changes.
The government wants the new universal funding model to begin in September, but some institutions will have opened their doors to new students by then, raising questions about which system will finance the 2026/2027 intake.
The proposed changes are part of the Tertiary Education Placement and Funding Bill 2026, which seeks to bring government support for university, college and TVET students under one institution.
The Bill proposes scrapping the Higher Education Loans Board (HELB), Universities Fund (UF) and Technical and Vocational Education and Training Funding Board (TVETFB) and replacing them with the Tertiary Education Funding Authority (TEFA).
The new authority would handle both government scholarships and education loans, creating one funding structure for students in universities, colleges and TVET institutions.
President Ruto has said the proposed system is intended to make higher education funding available to students regardless of their background.
“We now have in parliament the final version of how we are going to make higher education universal. It won’t matter what background any child in Kenya comes from; what will matter is how good they are. We have been thinking of how to fund higher education going into the future,” said Dr Ruto at State House.
The timing of the reforms has become a major issue because universities have already fixed dates for admitting their first-year students.
Masinde Muliro University of Science and Technology will receive its first-year students on August 20, followed by the University of Nairobi on August 24.
Kenyatta University has set August 26 for the arrival of new students, while Jomo Kenyatta University of Agriculture and Technology will start receiving first-year students from September 1.
Kibabii University is also expected to admit its first-year students in September.
With the reporting dates spread from August into September, students could begin their studies while Parliament is still considering the proposed funding law.
This has created uncertainty over whether the new intake will be covered by the current scholarship and loan arrangements or whether some students will move to the proposed system once the legislation is approved.
HELB chief executive Geoffrey Monari said students should not delay their applications because the board remains guided by the law currently in force.
He said applications for student loans are still being received and processed.
“Applications have not been suspended. Applications are ongoing. You can’t wait. We just follow the law of the day. The president requested that parliament approves the changes.
So as we wait for that, we will continue to process student loans ,” he said.
Monari said HELB would make the necessary changes if Parliament approves the Bill.
“Once the new law is approved, we will adapt accordingly. If parliament passes it, then we will implement it. For now, we are operating under the current law,” he told the Nation.
His remarks came as the proposed changes to higher education financing continued to be discussed in Parliament.
On Wednesday, Monari appeared before the National Assembly Education Committee and presented proposals on transforming HELB into a government-backed development bank.
The proposed institution would help provide financing for universities and colleges across the country.
Under the Bill, however, HELB would cease to operate as a separate institution alongside UF and TVETFB, with their functions transferred to TEFA.
The government expects the proposed funding structure to mobilise Sh100 billion every year from several sources.
These would include government funding, investors, parents, graduates and development partners.
The money would support the issue of education bonds backed by an annual Sh100 billion allocation. A sinking fund would also be set up to meet interest costs and repay the principal on the financing.
The proposed system would use investment banking and treasury functions and would be overseen by a governing board.
The Capital Markets Authority would regulate the programme.
Parents would also have an opportunity to build up education savings through an investment-based scheme to be listed on the Nairobi Securities Exchange.
Under the proposal, parents who put money into the scheme would be able to earn interest on their savings while preparing for their children's education costs.
The government also plans to rely on improved recovery of HELB loans as a source of money for the new system.
Other proposed sources include income-contingent repayments from graduates and low-interest, long-term concessional funding from development partners.
At the Universities Fund, chief executive Dr Edwin Wanyonyi said students should continue using the existing system until the proposed law is passed.
“There is no vacuum. The law that is currently in place is what we are implementing, and we will continue to operate under that framework until parliament passes a new law,” he said.
Dr Wanyonyi said the transition would only begin after Parliament completes its work and the Bill receives royal assent.
“Once the bill has completed the parliamentary process and received royal assent, we will make the necessary adjustments. The process also allows stakeholders and members of the public to give their views before a final decision is made. Therefore, so for now we are proceeding with the current system.”
He said continuing students were already responding to the annual funding application process, with about 70 per cent having reapplied.
“Applications are ongoing, and we have received an excellent response. We are at about 70 per cent for continuing students. Continuing students are required to reapply every year because funding follows the student. This means each learner has to confirm that they are still at university before funds are released,” said the official.
He said the current arrangements would remain in place as universities begin the new academic year.
“As universities are opening from mid-August to early September, we will continue processing applications under the existing framework until there is a change in the law,” he said.
The proposed TEFA would also establish a Tertiary Education Fund to support government scholarships and other higher education financing needs.
The fund would receive money from parliamentary allocations, loan repayments, investments, grants and donations.
The Bill would also open the door for any Kenyan admitted to a recognised public or private university, college or TVET institution to apply for a government education loan, provided they meet the conditions set by law.
The proposed changes are aimed at creating a single funding system for tertiary education, but their rollout remains tied to the parliamentary process.
For students preparing to join campus in the coming weeks, the immediate position remains unchanged: applications will continue under the current law until Parliament approves the new framework and the government moves to implement it.