Hundreds of thousands of university and Technical and Vocational Education and Training (TVET) students could miss out on full government funding next year after budget estimates revealed a significant shortfall in allocations for loans and scholarships.
The 2026/27 Budget Estimates show that the Higher Education Loans Board (HELB) and the Universities Fund are facing a combined funding deficit of more than Sh72 billion, raising concerns about the sustainability of higher education financing and access for students from disadvantaged backgrounds.
According to the estimates presented by National Treasury Cabinet Secretary John Mbadi, HELB has been allocated Sh56.3 billion against a requirement of Sh112.1 billion needed to support approximately 1.38 million students. This leaves a funding gap of Sh55.8 billion.
Based on the allocation, each student would receive an average of about Sh40,694, significantly lower than the estimated requirement of Sh81,020 per beneficiary. The shortfall amounts to roughly Sh40,327 per student.
An analysis of the figures indicates that the available allocation would only be sufficient to fully support about 695,000 students under the current funding model. As a result, nearly 689,000 of the projected beneficiaries may not receive full financial support.
The Universities Fund is also grappling with a funding deficit. The agency has been allocated Sh31.1 billion against a requirement of Sh47.36 billion for scholarships, leaving a shortfall of Sh16.26 billion.
The fund estimates that each beneficiary requires an average of Sh216,072 in support, but the proposed allocation provides only about Sh141,827 per student. This creates an average funding gap of approximately Sh74,245 for each of the 219,279 students expected to benefit from scholarships in the next financial year.
The deficit is expected to increase the burden of pending obligations. Data from the Universities Fund shows outstanding scholarship commitments are projected to rise from Sh22.26 billion in the current financial year to Sh38.52 billion in 2026/27.
“The Universities Fund has been implementing the Student-Centred Funding Model, which adopts a need-based approach to student financing, offering scholarships and loans based on individual students’ financial capability,” Higher Education Principal Secretary Beatrice Inyangala recently told the National Assembly’s Departmental Committee on Education.
Under the model, students are categorised according to their level of financial need, with those from the most vulnerable households receiving the highest levels of support through a combination of scholarships and loans.
The funding pressure comes amid a sharp rise in enrolment across universities and TVET institutions, coupled with increasing operational costs. Government figures show student enrolment has grown from about 70,000 in 2017 to nearly 258,000 in 2025, representing an increase of more than 300 percent.
Currently, 437,648 students are being financed under the student-centred funding model, drawn from the 2023, 2024, and 2025 admission cohorts.
The latest budget allocations underscore the challenge facing the government as it seeks to expand access to higher education while operating within constrained public resources.
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