Ol Kalou MP Ngotho Torpedoes Tertiary Education Funding Bill Over Costly Student Loans

On the morning of October 21, 2026, Kenya’s National Assembly became the stage for a sharp confrontation over the future of university financing. Ol Kalou MP Ngotho took to the floor to oppose the Tertiary Education Funding Bill, warning that its proposed loan-centric model would burden students with debt and undermine equitable access to higher education. The bill, which aims to restructure the Higher Education Fund (HEF) and the Higher Education Loans Board (HELB), has ignited a fierce debate about the sustainability of Kenya’s tertiary education system.

The Bill’s Blueprint: A Shift Toward Loans

The Tertiary Education Funding Bill, introduced earlier this year, proposes a significant overhaul of how public universities and technical colleges are financed. At its core, the bill seeks to replace the current dual-track funding system - where students receive a mix of government scholarships and loans - with a more loan-heavy model. Under the proposed framework, the government would reduce direct grants to universities and instead expand the loan component administered by HELB, with students expected to repay a larger share of their education costs after graduation.

Proponents argue that the current system is unsustainable, with HEF facing a funding gap of over KSh 20 billion annually. They contend that shifting more responsibility to students will instill fiscal discipline and encourage universities to diversify their revenue streams. However, critics like MP Ngotho see this as a recipe for deepening inequality.

Ngotho’s Warning: Debt Without Degrees

In his address, Ngotho did not mince words. “We are not just talking about numbers; we are talking about the futures of thousands of young Kenyans,” he declared. “This bill will force students from poor backgrounds to take on loans they cannot afford, only to graduate into a job market that is already strained. We risk creating a generation of debt-laden graduates who will spend years paying off loans instead of building their lives.”

Ngotho’s concerns are backed by recent data from the Kenya National Bureau of Statistics, which shows youth unemployment hovering around 13.4% as of Q2 2026. For many graduates, the prospect of repaying a loan of KSh 500,000 or more on a starting salary of KSh 30,000 per month is daunting. The bill’s proposed interest rate - pegged at 4% above the Central Bank Rate - could make repayment even more burdensome if rates rise.

The Mechanics of the Proposed Funding Model

To understand the stakes, it’s worth examining the technical details of the bill. The current funding architecture, established under the Higher Education Loans Board Act and the Universities Act, provides a combination of grants (up to 80% of unit costs for government-sponsored students) and loans (up to KSh 60,000 per year). The new bill proposes the following changes:

• Reduction in Grants: Government grants would be capped at 40% of unit costs, with the remainder covered by loans and institutional income.
• Loan Limits: HELB loans would increase to KSh 150,000 per year for undergraduate programs, with repayment starting six months after graduation.
• Interest Rate: A floating rate of CBR + 4% (currently 12.5% as of October 2026) would apply, compared to the current fixed 4% for loans.
• Means Testing: A more stringent means-testing formula would be introduced, potentially excluding middle-income families from loan eligibility.

These changes are designed to reduce the government’s fiscal burden, but they also shift risk to students and their families. For a student pursuing a four-year degree, the total loan burden could exceed KSh 600,000, with interest accruing during the grace period.

The Broader Context: HEF and HELB Under Pressure

The Tertiary Education Funding Bill comes at a critical juncture for Kenyan higher education. Public universities have been grappling with chronic underfunding, leading to dilapidated infrastructure, strikes by academic staff, and a decline in research output. The HEF, which was established in 2019 to consolidate various funding streams, has struggled to meet the growing demand for university places. In 2025, only 60% of qualified students received government sponsorship, leaving thousands to seek private funding or drop out.

HELB, meanwhile, has its own challenges. The board’s loan recovery rate stands at a dismal 15%, according to a 2025 report by the Auditor General. This has constrained its ability to recycle funds and extend loans to new students. The bill proposes stricter recovery measures, including the use of the Kenya Revenue Authority to garnish wages and the introduction of a credit-scoring system for borrowers. While these measures could improve recovery, they also raise concerns about privacy and the criminalization of default.

The Parliamentary Battle Ahead

Ngotho’s opposition is not isolated. Several MPs from both the ruling party and the opposition have expressed reservations about the bill, particularly its impact on students from marginalized regions. The Parliamentary Committee on Education, which is currently reviewing the bill, has scheduled public hearings across the country to gather stakeholder input. University student associations, including the Kenya University Students’ Organization (KUSO), have vowed to stage protests if the bill is passed without amendments.

The bill’s fate now hangs in the balance. It must pass through the committee stage, where amendments can be introduced, before returning to the floor for a final vote. Ngotho has indicated that he will push for amendments to reinstate higher grants and cap interest rates. “We need a funding model that is fair, transparent, and sustainable,” he said. “Not one that mortgages our children’s future.”

Technical Trade-offs: Sustainability vs. Access

The debate over the Tertiary Education Funding Bill is fundamentally a trade-off between fiscal sustainability and equitable access. On one hand, the government’s fiscal space is constrained, and the current funding model is indeed unsustainable. On the other hand, shifting to a loan-heavy model without adequate safeguards could deter poor students from pursuing higher education, exacerbating existing inequalities.

International comparisons offer some insights. In South Africa, the National Student Financial Aid Scheme (NSFAS) provides full scholarships to poor students, funded by government. In contrast, Ghana’s Student Loan Trust Fund operates on a loan model with a 10-year repayment period and a low interest rate. Kenya’s proposed model leans closer to Ghana’s but with higher interest rates and shorter repayment periods.

Economists argue that the design of student loans matters immensely. A well-designed loan scheme should have income-contingent repayment, low interest rates, and robust safety nets. The current bill lacks these features, which is why critics like Ngotho are calling for a rethink.

What’s Next for Kenyan Students?

As the parliamentary committee begins its public hearings, students and universities are watching closely. The outcome will determine not only the financial burden on individual students but also the overall health of Kenya’s higher education system. If the bill passes in its current form, universities may see a decline in enrollment from low-income students, while those who do enroll may face significant financial stress.

For now, Ngotho’s stance has galvanized opposition and forced a national conversation about the value and cost of higher education. Whether his warnings will translate into substantive amendments remains to be seen, but one thing is clear: the fight over the Tertiary Education Funding Bill is far from over.

This article was informed by reports from Education News. Additional context from the Higher Education Loans Board and the Commission for University Education.