Why the new university funding model is a game changer

The new university funding model is on the right track, according to Higher Education Principal Secretary Beatrice Inyangala and Daniel Mugendi, chair of the Vice Chancellors’ Committee.

Speaking on Spice FM on Tuesday, September 16, the two described the model as a game-changer that improves cash flow to universities.

“The old capitation-based funding model for universities was unsustainable, which is why many institutions accumulated debts,” Mugendi said.

He added that the new model is a student-centered approach and is already delivering results.

“Things are changing. Education sector is also changing, and this funding model will be a game-changer. With this new model, we are seeing funds flowing into the universities. We are on the path of sustainability.”

Inyangala said the ministry designed the model around three pillars, including strengthening, governance, and leadership, to address universities’ financial struggles. She noted that the government is also increasing resources to help institutions settle debts.

“Universities have long struggled with debts and pending bills. We designed a funding model to boost cash flow while working with them on three pillars: strengthening, governance, and leadership.”

“In 2022, twenty-three universities were insolvent. Now, only 13 are technically insolvent, but they still have assets. Part of the solution is to optimise these idle assets,” she said.

On his part, Mugendi urged universities to pursue grants and partnerships to cushion themselves during delays in government disbursements.

He also said universities are preparing for changes in enrolment under the new education system. “We’re aware the curriculum has changed, and we’ve started retooling our lecturers,” he said.

PS Inyangala added that reforms across the education sector, from Competency-Based learning to higher education, are shifting focus from knowledge acquisition to practical skills.