A proposal to change how Kenya pays for university and TVET education is now before Parliament. Its appeal to families is clear: students could receive more government support when they enrol. The question is how much of that support they would have to repay.
The Tertiary Education, Placement and Funding Bill, 2026 sets out a system for student loans, scholarships and placement. Parliament has begun public hearings on the proposal. It is a bill, not a change to the funding rules already in force.
What would students receive?
Under the bill, Kenyan students and trainees admitted to eligible tertiary institutions could apply for an education loan. Being eligible would not guarantee a loan: the proposed Tertiary Education Funding Authority would assess applications using funding criteria it sets in consultation with the Education Cabinet Secretary. Students seeking funding would have to apply.
The bill also says the authority would administer scholarships for eligible students. That matters because a scholarship and a loan leave a family in very different positions: a loan creates a repayment obligation. The bill does not spell out a simple percentage showing how much of each student’s costs would be covered by a scholarship rather than a loan.
Today’s funding model already combines scholarships, loans and household contributions. The Universities Fund says its scholarships cover between 30% and 70% of eligible students’ tuition, depending on assessed need. The proposed bill could change how support is administered, but families cannot calculate their future share from the bill alone.
When would a loan be repaid?
The bill says a borrower would begin repaying within one year of completing studies, along with accrued interest and applicable charges. For a borrower in formal employment, monthly deductions could be made through an employer. The bill caps those deductions at 25% of the borrower’s earnings; it does not say every graduate would have 25% deducted. A borrower in informal employment would agree on a payment plan with the authority.
The interest rate is another point to watch. At a public hearing, Education Committee chair Julius Melly said the proposal involved a 4% rate. But the published bill does not lock that figure into its clauses. It gives the proposed authority power to set loan interest in consultation with the Cabinet Secretary. Readers should therefore treat 4% as the rate described at the hearing, rather than a guaranteed term in the bill.
So is “fully funded” the same as free?
No firm answer for every student is available yet. Government funding could include a scholarship, which a student would not repay, and a loan, which they would. The bill establishes both, but leaves the funding criteria and the size of individual awards to decisions that would follow. Calling the proposal “free university education” would therefore promise more than the published clauses establish.
For families, the useful figures will be the scholarship amount, loan amount, interest rate and repayment schedule offered to a student. Until those terms are clear and Parliament has decided the bill’s final wording, parents and applicants should continue to use the current official funding process.
