Kenya Proposes Scrapping University Scholarships in Major Funding Shift
Nairobi, 6 August 2026
Kenya’s proposed higher education reform will replace university scholarships with loans, raising graduate salary repayment deductions from a four per cent cap to an unprecedented 25 per cent.
A Consolidation of Funding Mechanisms
On 5 August 2026, Kenya’s Education Cabinet Secretary, Julius Ogamba, presented the proposed Tertiary Education Placement and Funding Bill before the National Assembly Committee on Education [1]. The proposed legislation intends to replace the existing Student-Centred Funding Model (SCFM), which was originally introduced in May 2023 [1]. Under the current model, the Universities Fund covers between 30 per cent and 70 per cent of tuition costs through scholarships, with the Higher Education Loans Board (HELB) funding the remainder and providing upkeep loans [1]. The new Bill proposes to merge these separate entities—including HELB, the Universities Fund, and technical and vocational education and training (TVET) scholarship programmes—into a unified higher education funding authority [1][2].
Shifting the Burden to Repayable Loans
If approved, the new policy will entirely scrap public university scholarships, transitioning the system to a model where 100 per cent of government student financing is delivered as repayable loans [1][2]. The newly established authority will manage a centralised database to streamline data management and consolidate funding streams [1][2]. To diversify its revenue base and sustain this model, the government plans to leverage non-traditional financial mechanisms, including capital markets, education bonds, and concessional loans from international development partners [1].
Stricter Repayment Terms and Graduate Safeguards
The proposed Bill introduces significant changes to how graduates will repay their student debt. Loan deductions from a beneficiary’s earnings are set to rise from the current cap of four per cent to an unprecedented maximum of 25 per cent [1]. This represents a percentage increase of 525 per cent in the maximum repayment rate [1]. Repayments are scheduled to commence one year after a graduate secures formal employment, and beneficiaries will be legally required to disclose their loan status to employers immediately to facilitate direct salary deductions [1][2]. For those operating in the informal sector, individual repayment agreements must be negotiated directly with the new funding authority [1][2].
Default Policies and Parental Savings Schemes
Despite the stricter repayment caps, the framework includes measures to protect unemployed graduates. Those who experience gaps in employment will not face financial penalties; instead, any unpaid amounts will be appended to the end of the loan term without incurring default charges [1]. However, the authority will hold legal powers to recover outstanding debts as civil debts, allowing for legal action against persistent, non-compliant defaulters [1][2]. Additionally, the legislation proposes an education savings scheme, allowing parents to save funds for their children’s tertiary education prior to their enrolment [1].
Navigating Current Portal Applications and Postgraduate Funding
While Parliament debates these sweeping reforms, students currently seeking higher education funding must continue navigating existing systems. On 5 August 2026, HELB issued a public notice to students experiencing technical difficulties activating their accounts on the Higher Education Financing (HEF) Portal [3]. The agency advised applicants to check their spam or junk email folders for activation links, warning that these links remain valid for only three hours [3]. If a link expires, the student must register afresh on the portal at www.hef.co.ke [3].
Active Postgraduate Scholarship Opportunities
Separately, HELB opened applications on 30 July 2026 for the 2026/2027 postgraduate partial scholarships, targeting Master’s and PhD students enrolled in local public or private universities recognised by the Commission for University Education (CUE) [3]. To qualify, applicants must hold at least a Second-Class Upper Division undergraduate degree and have a valid admission letter for a STEM (Science, Technology, Engineering, and Mathematics) or Agriculture-related course [3]. Furthermore, any applicant who previously benefited from a HELB loan must either be actively repaying it or have fully cleared their outstanding balance [3]. The scholarship provides Ksh 200,000 for Master’s programmes (tenable for two years) and PhD programmes (tenable for three years), with applications requiring a non-refundable fee of Ksh 3,000 paid via the eCitizen platform [3]. HELB has cautioned applicants to beware of fraudsters, noting that all processing is fully automated [3].