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Assignment One

Challenges Facing Higher Education Financing in Kenya

Kibet Fredrick

21/02135

School of Education, Arts and Social Sciences, KCA University

MLM 532 Financial Management in Education Institutions

Dr. Anne Munuku

Tuesday, 26 September 2023

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Assignment One

Challenges Facing Higher Education Financing in Kenya

In Kenya, higher education financing faces numerous challenges that hinder

accessibility and affordability for students. From inadequate government funding to rising

student loan debt, the current system is under strain. This document explores the key

obstacles and highlights the need for innovative financing models.

Lack of Government Funding

The lack of sufficient government funding poses a significant obstacle to higher

education in Kenya. With limited financial resources, universities struggle to provide quality

education and maintain necessary infrastructure. This puts a strain on students, who may face

overcrowded classrooms, outdated facilities, and a lack of educational resources.

Increasing Tuition Fees

The cost of higher education in Kenya has been steadily increasing over the years. As

a result, many students find it difficult to afford tuition fees, limiting their access to higher

education. This financial burden can discourage aspiring students from pursuing their

academic goals and perpetuate educational inequality.

Public Universities

Although they charge lower tuition fees compared to private institutions, the cost is

still high for many Kenyan families.

Private Universities

Often charge significantly higher tuition fees than public universities. This makes

them affordable to only a few individuals from wealthy backgrounds.

Other Costs

Textbooks, accommodation, and food expenses also add up to the already excessive

cost of higher education, further limiting the number of individuals who can afford it.
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Limited Access to Financial Aid

Access to financial aid is crucial for students who lack the means to pay for their

education. Unfortunately, in Kenya, many students face challenges in accessing scholarships,

grants, and other forms of financial assistance. This limited availability of financial aid

further exacerbates the barriers to higher education for disadvantaged students.

Rising Student Loan Debt

As tuition fees increase and financial aid becomes harder to access, students often turn

to student loans to finance their education. However, this leads to a significant rise in student

loan debt, burdening graduates with financial obligations that can take years or even decades

to repay.

According to a survey by FinAid Kenya, over 50% of students in public universities

depend on HELB loans.

Private university students, however, face challenges since HELB offer student loans

to students in selected universities.

Lack of Transparency in Funding Allocation

A lack of transparency in the allocation of financing to universities or individuals

creates mistrust and scepticism among Kenyans, especially when resources are distributed to

areas without clear justifications.

Impact of External Factors on Financing

The economy, political stability, and donor support are external factors that contribute

to the financing of universities. These factors affect the amount of funding available to

universities and create uncertainty about future financing for higher education.

Inadequate Infrastructure and Resources

The lack of adequate infrastructure and resources in Kenyan higher education

institutions hampers the learning experience. Outdated equipment, limited library resources,
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and inadequate technology can hinder students' ability to acquire the necessary knowledge

and skills for success in the job market.

Mismatch Between Education and Job Market

Another challenge facing higher education financing in Kenya is the mismatch

between the education provided by universities and the requirements of the job market.

Graduates often struggle to find employment due to a gap in skills and knowledge. This

highlights the need for educational institutions to align their programs with the demands of

the evolving job market.

Need for Innovative Financing Models

To address the challenges of higher education financing in Kenya, innovative

financing models are required. These models can include public-private partnerships, income-

contingent repayment schemes, and scholarship endowment funds. By exploring innovative

approaches, we can create a system that ensures greater accessibility and affordability for all

aspiring students.

Factors Contributing to the Financing Challenges

The financing challenges in higher education are primarily due to the lack of long-term

planning, inadequate government funding, and the failure to address systemic issues.

a) Low priority accorded to higher education financing.

b) Lack of appropriate policies and legal frameworks to guide financing.

c) Inadequate public awareness and engagement on financing issues

d) Corruption and mismanagement of resources

e) Inadequate funding from external sources such as donors and partners

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Impact of Higher Education Financing Challenges on Students and Institutions

Students

High tuition fees and limited access to loans and grants have led to exclusion of many

qualified students, high drop-out rates, and graduation delays.

Institutions

Inadequate funding and resources have impacted negatively on the quality of

education and research, the ability to attract and retain qualified staff, and the development of

necessary infrastructure and equipment.

Possible Solutions to Address the Financing Challenges

Solution Description

The government can increase its funding of higher education

Increased government
institutions by allocating more resources towards education in its
funding
budget.

Private sector companies can invest in higher education institutions

Public-private
in exchange for tax incentives, research collaboration or access to
partnerships
skilled graduates.

Development of
Institutions can develop partnerships with private foundations,
alternative funding
individual donors, or alumni to diversify their funding sources.
sources

Policy Recommendations for the Government and Other Stakeholders

Policy Recommendations for the Government

The government should:

a) Develop long-term strategic planning and budgeting for higher education.

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b) Increase funding for higher education institutions through the establishment of a Higher

Education Fund

c) Ensure transparency and accountability in resource allocation and management.

Policy Recommendations for other Stakeholders

Other stakeholders should:

a) Engage in corporate social responsibility by providing scholarships and funding for

education.

b) Collaborate with higher education institutions to develop programs that are relevant to

industry needs.

c) Provide support in developing research and innovation activities to generate funding.

Conclusion

Higher education financing in Kenya is facing several challenges, but these can be

addressed through collaboration among stakeholders and the formulation of appropriate

policies and frameworks. This will not only ensure access to higher education for the bright

minds in the country but also enable a skilled competitive workforce and improved economic

growth.
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References

Abuodha, P. (2014). Financing of Higher Education in Kenya: A Review of the Policy

Framework. Journal of Education and Practice, 5(10), 81-85.

Commission for University Education. (2019). State of University Education in Kenya: 2018

Report. Nairobi: Commission for University Education.

Kimeli, V. K. (2019). Determinants of sustainable financing for higher education in Kenya.

International Journal of Multidisciplinary Research and Development, 6(1), 148-153.