The K-P universities deficit has reached Rs5.6 billion, with 26 of the province’s 34 public universities in severe financial difficulty. The province has asked the federal government for a special grant of Rs18 billion to keep them running.
The provincial Higher Education Department made the request in an official letter to the chairman of the Higher Education Commission (HEC). Nearly 200,000 students are being affected by the financial difficulties facing the universities.
The department has asked the federal government and the HEC for the grant so that public universities can stay open and keep teaching.
How the K-P universities deficit grew
The gap did not appear overnight. Funding through grants remained short by Rs18 billion during the last decade despite provincial support, because pay and pension costs rose faster than grants.
“The federal grant through HEC decreased by 6.3pc during the last three years while expenditure increased by more than 18pc in the same period,” the letter said. Salary and pension costs have risen by more than 135 per cent since 2018-19, with pension alone up by more than 80 per cent.
The numbers tell the story. Over three years, spending climbed from Rs40.8 billion to Rs54.8 billion, the count of universities in deficit doubled from 12 to 26, and the grant for each student slipped from Rs82,000 to Rs72,000.
Pay went up 31 per cent while grants rose only 8.5 per cent, so grants now meet just 40 per cent of the pay and pension bill, against 49 per cent before.
Khyber Pakhtunkhwa has lifted its own contribution from nothing to Rs11.85 billion. That narrowed the shortfall without closing it, and most of the money went to clearing pension dues from earlier years.
The heaviest cases
The University of Peshawar, the oldest in the province, carries the biggest deficit at Rs2.2 billion, plus a Rs53.6 billion pension liability to settle over the long term. Agricultural University Peshawar needs Rs0.8 billion, while Gomal University in Dera Ismail Khan and Abdul Wali Khan University in Mardan each need up to Rs0.7 billion to cover their deficits and unpaid dues this financial year.
The burden is passing to students through higher fees, the letter said. Fees have risen by 28 per cent between 2024-25 and 2026-27 and now cover about 59 to 64 per cent of expenditure. Any further rise would make public higher education unaffordable, it warned.
In the province, government grants make up only about 36 to 41 per cent of what universities take in, while in OECD countries the figure is 69 per cent. The gap needs to be filled by the government, the letter argued.
The department wants the Rs18 billion split three ways: clearing accumulated deficits, settling outstanding liabilities, and funding development plus seed money for endowment funds. Rs12 billion of it would build lasting assets that generate permanent income, easing future pressure on the budget.
Abidullah Kakakhel, the higher education department’s secretary, told Dawn the province’s frontline role in the war against terrorism had strained its resources and threatened its ability to keep public higher education going. He said only steady, structured federal help could protect students’ access to education and keep the institutions stable.
The crisis has already reached the courts. The Peshawar High Court sought detailed financial and administrative records of public universities in September, Minute Mirror reported, as it heard petitions on salary and pension payments. Counsel for the University of Peshawar told the court the institution faced a shortfall of about Rs2.07 billion with around 25,000 students, and the bench directed the chief secretary to prepare university-wise financial recovery plans.
What the department proposes
It also wants enrolment numbers to decide how grants are shared out, so bigger universities get more in line with their needs.
The funding squeeze sits alongside other pressures on the province. Khyber Pakhtunkhwa plans to spend Rs70 billion on its police and counterterrorism force, and KP and Gilgit-Baltistan have agreed to settle old boundary disputes through talks. For students, the HEC has made a national skill test mandatory for computing and IT students, while the PM’s youth loan limit has been raised to Rs25 million. In the south of the province, Tharparkar farmers are awaiting a relief package after drought destroyed most of their crops.
What happens next
The ball is now with the federal government and the HEC. If the grant does not come, universities will have to raise fees again or cut spending, and students will pay the price either way.
Frequently asked questions
How many K-P universities are in deficit?
Twenty-six of the province’s 34 public universities are in financial deficit, with a combined shortfall of Rs5.6 billion.
How much money has K-P asked for?
The provincial Higher Education Department has sought a special grant of Rs18 billion from the federal government through the Higher Education Commission.
How many students are affected?
Nearly 200,000 students study at the province’s public universities, and the letter says they are being affected by the financial difficulties.
Which university has the largest deficit?
The University of Peshawar carries a deficit of Rs2.2 billion, the largest in the sector, along with a Rs53.6 billion pension liability.
Why did the deficit grow?
Grants did not keep pace with pay and pension rises. The federal grant through the HEC fell by 6.3 per cent over three years while expenditure rose by more than 18 per cent.
