The TSC Supplementary Budget 2025–2026 has positioned the Teachers Service Commission (TSC) as the biggest beneficiary in the education sector after the Kenyan government approved additional funding to address urgent financial gaps.
In a move aimed at stabilizing the sector, the government allocated billions of shillings to ensure smooth operations in schools and improve teacher welfare.
According to the Supplementary Appropriations Bill recently signed into law by President William Ruto, the TSC has received a massive allocation of KSh 24.2 billion. This funding is expected to cover salary shortfalls and facilitate health insurance contributions for teachers across the country.
In addition, the Commission has been granted KSh 3 billion specifically to clear pending medical insurance bills. This comes as a relief to thousands of teachers who have been struggling to access healthcare due to delays and inefficiencies in the system.
Why the TSC Needed Urgent Financial Support
The TSC Supplementary Budget 2025–2026 comes at a critical time when the Commission has been battling a severe financial crisis. With over 340,000 teachers under its payroll, TSC has been struggling to meet its financial obligations due to persistent budget deficits.
A recent audit by Auditor General Nancy Gathungu revealed the depth of the crisis. As of June 30, 2025, TSC had a budget deficit of KSh 4.38 billion, highlighting its inability to meet short-term financial commitments.
Even more concerning was the Commission’s negative working capital. The audit showed that TSC had liabilities worth KSh 12.3 billion against assets of only KSh 4.4 billion, resulting in a deficit of KSh 7.9 billion.
This financial strain made it difficult for the Commission to effectively deliver services.
Teachers’ Medical Cover Crisis
One of the biggest challenges addressed in the TSC Supplementary Budget 2025–2026 is the teachers’ medical insurance scheme. Over the past few years, teachers have faced serious challenges accessing healthcare due to delayed payments and accumulated bills.
The total cost of the medical insurance scheme stands at a staggering KSh 53.58 billion over three years. Due to funding gaps, many teachers have been forced to pay for treatment from their own pockets, raising concerns about their welfare.
The additional KSh 3 billion allocation is expected to ease pressure on the scheme and restore confidence among teachers. However, experts warn that long-term reforms are still needed to ensure sustainability.
Pending Bills and Legal Claims Add to Pressure
The financial burden on TSC has also been worsened by accumulated pending bills. The audit report flagged KSh 12.3 billion in pending bills, some of which have remained unpaid for years.
Additionally, the Commission is dealing with compensation claims under the Workers’ Injury Benefits Act amounting to KSh 186 million. Some of these claims date as far back as 2001, showing how long-standing the financial challenges have been.
These liabilities highlight the urgent need for consistent and adequate funding to prevent similar crises in the future.
HELB Funding Gap Leaves Thousands of Students Stranded
Beyond the TSC, the TSC Supplementary Budget 2025–2026 also touches on other critical areas in the education sector, including student financing.
The Higher Education Loans Board (HELB) received an additional KSh 4.1 billion, bringing its total allocation to KSh 45.6 billion. However, this is still far below the required KSh 74.4 billion needed to support over 1.1 million students in universities and TVET institutions.
Due to this shortfall, only about 650,267 students can be funded, leaving a massive 453,889 eligible students without financial support. This situation has raised serious concerns about access to higher education in Kenya.
Universities Get Partial Relief Through Salary Allocations
Universities and colleges have also benefited from the supplementary budget, although the funding remains insufficient to fully address their needs.
The government allocated KSh 3.88 billion to settle salary arrears for lecturers under the 2017–2021 Collective Bargaining Agreement (CBA). This represents only half of the KSh 7.76 billion agreed upon, meaning more funding will still be required.
This partial payment offers some relief to university staff who have waited years for their dues, but it also highlights ongoing financial challenges in the higher education sector.
Targeted Support for Universities and Infrastructure Development
The TSC Supplementary Budget 2025–2026 also includes targeted funding for specific universities. The government allocated:
- KSh 3.45 billion to Moi University for restructuring and financial stabilization
- KSh 250 million to Kabarnet University for infrastructure upgrades
Additionally, the State Department for Higher Education received KSh 6 billion to support general administration and operations in public universities.
These allocations are part of broader efforts to improve the quality of higher education and ensure institutions remain functional despite financial challenges.
University Fund Still Faces Major Deficit
The University Fund also received an additional KSh 1.5 billion, increasing total scholarship funding to KSh 18.42 billion. However, the funding gap remains significant.
The fund is currently facing a combined deficit of KSh 20.8 billion across two financial years. In both 2024–2025 and 2025–2026, allocations fell far below requirements, leaving thousands of students at risk of missing out on education opportunities.
The situation has been worsened by the increasing number of students joining universities, including over 180,000 new entrants from the 2024 KCSE cohort.
Investment in TVET to Boost Skills Development
In a bid to strengthen technical education, the government allocated KSh 2.6 billion for the Kenya–China TVET Project Phase III.
This initiative aims to improve infrastructure in technical and vocational institutions, equipping young people with practical skills needed in the job market. The investment aligns with Kenya’s long-term goal of promoting skills-based education and reducing unemployment.
What This Means for Teachers and the Education Sector
The TSC Supplementary Budget 2025–2026 is a clear indication that the government is prioritizing education despite economic challenges. For teachers, the additional funding brings hope for:
- Timely salary payments
- Improved access to medical services
- Reduced financial stress
However, experts caution that supplementary budgets are only short-term solutions. Sustainable funding models and better financial management will be crucial in preventing recurring deficits.
Conclusion: A Step Forward, But Challenges Remain
While the TSC Supplementary Budget 2025–2026 provides much-needed relief, it also exposes the deep-rooted financial challenges facing Kenya’s education sector.
From teacher welfare to student funding and university operations, significant gaps still exist. The government’s efforts are commendable, but long-term strategies will be essential to ensure stability and growth.
For now, teachers, students, and institutions can only hope that these interventions mark the beginning of lasting reforms in the education system.
