Universities barred from raising fees after court battle

Kenyan public universities have been dealt a big blow after the High Court in Nairobi barred institutions from increasing tuition fees.

The Kenya Medical Practitioners, Pharmacists and Dentists Union had moved to challenge a decision by the University of Nairobi (UON) to effect new charges on students.

The court ruled on 22 October 2021 that the differentiated unit cost (DUC), the formula the university had relied on to make the changes, was unconstitutional as it was not subject to public consultation at the time of implementation.

Public universities were relying on the model by the Universities Funding Board – the agency that sets fees on behalf of the government – in increasing the tuition charges to align them with current economic realities.

In July 2021, the UON more than doubled fees for postgraduate courses and parallel degree programmes. The new rates were to apply to new students, meaning the institution would have transitioned to the new regime within the next five years.

For example, the university raised fees for MBAs to US$6,000 from an average US$2,700, an increase of close to 120%.

Delivering his ruling, High Court judge Justice Anthony Mrima said: “A declaration is hereby issued that the implementation of the maximum differentiated unit cost criteria by the first respondent [the University of Nairobi] through the handbook of fees payment is unconstitutional and null and void ab initio.”

All universities affected

In its defence, the UON said that the new fees were arrived at following consultations among the Vice-Chancellors’ Committee, the University of Nairobi Fees Revision Committee, University Executive Management Board, University Deans Committee, and the University Senate.

The precedent-setting ruling means that all universities are now bound by the court’s decision and cannot increase tuition fees.

This is also a big win for the government which has been facing a backlash from the citizenship over its inability to stop universities from increasing the rates. Kenya’s Education Secretary, Professor George Magoha, has recently been on a spree, pleading with universities not to increase tuition fees and, instead, to execute austerity measures aimed at freeing up funds for investment in academic projects.

The court action also rendered a model that the government had pushed for to be used in determining fees redundant.

Public universities are currently financed by the government under the DUC system, whereby funding is based on the cost of offering a degree programme. For private universities, the government also issues conditional grants for specific programmes. For a long time, the argument has been that the DUC is the most viable to help address rising financial pressures in the institutions.

Vice-chancellors and chairs of university councils in November 2020 petitioned parliament to sanction a fee increment that was supposed to guarantee institutions’ sustainability.

The vice-chancellors wanted all state-sponsored students to pay annual tuition fees of US$600, up from the current US$265. Private universities are also seeking to double their fees from the current US$700 to US$1,400 a year.

Cash-flow crisis

The court decision is expected to further hurt Kenya’s oldest and second-biggest public university. Over the past three years, the UON has been struggling to get out of financial distress which threatens to stifle its ambitions in the coming years.

In an assessment of public universities in February 2017, the auditor-general listed the university among 11 of the country’s institutions that are insolvent.

The UON is running one of the biggest deficits among universities in the country and has been unable to meet pension and other statutory deductions for its workers.

Public universities have statutory debts totalling US$1.9 billion owed to the Kenya Revenue Authority. This is in addition to outstanding statutory obligations to pension schemes, and workers’ savings and cooperative societies.

The UON leads with US$55 million and US$27 million, respectively. This week, Professor Stephen Kiama, vice-chancellor of the UON, said the university owes the Kenya Revenue Authority US$720 million, underlining a deepening cash flow crisis at the institution amid a dip in student enrolment.