Court of Appeal pauses High Court decision on University loans

The Court of Appeal has put a hold on the High Court ruling that declared the government's new university funding model unconstitutional and discriminatory.

On Wednesday, a three-judge bench comprising Justices Patrick Kiage, Weldon Korir, and Joel Ngugi directed the Attorney General, the Higher Education Loans Board (HELB), and the Trustees of the Universities Fund to set up an appeals mechanism for students dissatisfied with funding decisions.

The process, which must be completed within 14 days, will also be made public for transparency.

The judges further instructed that all students applying for or receiving financial aid must be informed that the funding model remains under legal challenge.

This means the current funding structure may change depending on the outcome of the appeal.

The directive comes in response to an appeal by the state following a ruling by Justice Chacha Mwita in December last year.

Justice Mwita had barred the government from implementing the Variable Scholarship and Loan Funding (VSLF) model, citing a lack of public participation.

He ruled that the model unfairly categorized students based on their perceived financial ability, making it discriminatory.

"It's unrealistic if not unfair to consider someone earning Sh70,000 per month as not needy considering the level of taxation in the country," Justice Mwita stated.

He emphasized that every person is equal before the law and should not be discriminated against on any basis.

According to Justice Mwita, the previous funding model ensured all students were treated equally, unlike the new one, which creates clusters labeling students as needy based on their family income.

He questioned how the categorization was determined, suggesting that it lacked clarity and fairness.

Under the contested model, students were grouped into five bands based on their family's monthly income.

Those earning below Sh5,995 were placed in band 1, while those in the highest category had a family income exceeding Sh120,000.

Students in lower-income bands received higher scholarships, while those in upper bands were expected to rely more on loans.

The government defended the new system, arguing that it allows all students to apply for financial aid and that applications are assessed using digital data analysis to determine need-based funding.

However, the court found that the model lacked legal backing and was unclear about how loans would be provided.

"This funding model is not anchored on any law. Its composition and its procedure remain unknown," Justice Mwita ruled.

With the appeal now in progress, affected students and stakeholders await clarity on the future of university funding in the country.