HELB, Universities Fund And TVET Fund To Merge Under New Higher Education Bill

Higher education financing system could soon undergo one of its biggest reforms in decades following a government proposal to merge the Higher Education Loans Board (HELB), the Universities Fund, and the TVET Fund into a single institution known as the Tertiary Education Funding Authority (TEFA).

The proposal is contained in the Tertiary Placement and Funding Bill, 2026, which is currently before Parliament for consideration.

If approved, the legislation will significantly transform how students in universities, technical colleges, and TVET institutions are financed by creating one central agency responsible for managing all government funding for tertiary education.

According to the proposed law, TEFA will become the country’s primary institution for administering student financing, replacing the fragmented system where different agencies are responsible for separate aspects of higher education funding.

The government says establishing a single authority will simplify the funding process, eliminate duplication of responsibilities, and create a more efficient and sustainable model for supporting students pursuing higher education.

Under the proposed arrangement, TEFA will inherit several critical functions currently performed by HELB, including the issuance of student loans and the recovery of loans from graduates once they enter the workforce.

The authority will also assume responsibility for managing funds currently administered through the Universities Fund and the TVET Fund Board.

The bill further introduces a major policy shift by replacing the income-based funding model introduced in 2023 with a universal government funding system.

Under the new framework, all eligible students admitted to public universities, colleges, and Technical and Vocational Education and Training (TVET) institutions would receive full government financial support regardless of their household income.

The proposed reforms come just days after President William Ruto announced a new higher education financing policy during an event at State House on Tuesday, July 21. The President declared that beginning in September 2026, every student who qualifies for placement in a public university or college will receive full government funding.

“Going forward, any student, so long as they have passed their examinations and they have been placed in a college or university, will get full funding for their higher education. It will be the choice for parents if they want to pay,” President Ruto said.

Under the proposed financing model, government support would cater for tuition fees, accommodation costs, and students’ living expenses. Graduates would then repay the portion advanced to them after securing employment, creating a revolving fund that can support future learners.

President Ruto defended the new proposal by arguing that the differentiated funding model introduced in recent years had failed to achieve its intended objectives. According to him, the model left many universities struggling financially after government allocations fell below expected levels.

“We tried the differentiated model. I think the Vice-Chancellors here know it didn’t work because it made most of our universities almost close down. After all, while we promised 80 per cent funding, we went down to 40 per cent,” the President stated.

The Tertiary Placement and Funding Bill, 2026 is now awaiting debate and approval in Parliament. The government is seeking to have the legislation passed in time to facilitate the rollout of the new funding framework from September 2026.

If lawmakers approve the bill and it is signed into law, the reforms are expected to ease the financial burden on thousands of Kenyan families by ensuring students are not forced to abandon their preferred courses because of an inability to raise household contributions.

In addition to financing students, TEFA will be responsible for strengthening loan recovery mechanisms to ensure beneficiaries repay their loans after joining the workforce.

The government says improved loan recovery will help sustain the funding programme and guarantee that future generations of students continue to access affordable higher education.