South Africa

South Africa

University funding: Boiling point imminent

University funding: Boiling point imminent

A year after #FeesMustFall, the chickens are coming home to roost in more ways than one. The DA on Monday slammed the Fees Commission and the Department of Higher Education and Training, blaming the crisis in universities on two decades of “chronic financial neglect by the ANC government”. The ANC is making noises about not increasing fees next year, while Treasury officials have admitted there is no budget to facilitate this. Meanwhile, the student body is restless, and the department is going to face serious consequences if it continues – metaphorically, at least – to write cheques it can’t cash. By MARELISE VAN DER MERWE.

DA Shadow Minister of Higher Education and Training Professor Belinda Bozzoli took several swipes at the ANC-led government’s management of tertiary education on Monday, saying “anaemic funding” and “massification” were behind the current fee crisis.

The Fees Commission was bound to fail as it had nobody with experience of universities on it, she added.

The DA was able to identify R2.73-billion in the 2016/17 budget which could have been transferred to assist poor students while also giving universities enough subsidies so they can pay their bills,” she told journalists in Parliament on Monday. “However, the ANC rejected these proposals, yet again contributing directly to the dire financial position in which universities now find themselves.”

Bozzoli, who was presenting the DA’s submission to the Commission of Inquiry into Higher Education and Training, slammed a “lack of appropriate funding from government”, high failure rates, and unsustainable fee increases. “Massification” was the pressure on universities to accept more students than they could handle or afford, she said.

Last week, it emerged that 16 of 26 universities in South Africa (62%) would be in financial distress in the 2017/2018 year – with the aggregate deficit across these 16 universities expected to come to nearly R4-billion.

Finding the funding for growth in both NSFAS funding and university subsidies will be difficult, but it is vital for our future that this be done. Even in the face of scarcity, South Africa has options to better spend its resources and better govern its institutions,” Bozzoli said.

The opposition’s proposal to the Commission included recommendations that universities should pay more attention to shaping “high quality graduates” rather than numbers accepted; that financial assistance for poor students should be “diluted as little as possible”, and that support for the “missing middle” should be aligned to the individual student’s financial need. University subsidies should also move gradually towards a level of 50% of costs to support quality education and minimise the fee-increase cycle, the submission added.

The party further recommended a gradual roll-out of R20-billion to the education sector, with R6.5-billion directed to the National Student Financial Aid Scheme (NSFAS).

Bozzoli underlined the need for supplementing higher education through accessible TVET colleges and other certified institutions, warning that overstretching universities’ limited resources would diminish the quality of instruction and research as well as worsening an already high drop-out rate. A simple fee-free structure would unnecessarily increase pressure on the fiscus, she said.

Bozzoli is not alone in applying pressure to improve fund management. Earlier this month, embattled Minister of Finance Pravin Gordhan said that if corruption were taken in hand, fees for poor students could easily be paid for.

We can very easily pay for some of the things we are pressured for at the moment – fees for university students who come from poor backgrounds‚” he said. “[I]f you pay the right price for the coal that you buy‚ if your tenders are priced correctly‚ if you don’t engage in the wrong kind of property deals in this part of the world and elsewhere… If you end even a quarter of that‚ we’ll get R30-R40-billion that the poor will benefit from.”

But to date, Minister of Higher Education and Training Blade Nzimande has been somewhat vague regarding solutions. In mid-August, News24 reported that MPs were growing increasingly frustrated with the Minister’s nonspecific references to “plans” that were being made. “When the presidential judicial commission concludes its findings next year, a plan will come,” Nzimande said.

But when members of the opposition complained to the Speaker that there was precious little concrete information given in the above-mentioned plans, Nzimande grew perceptibly annoyed.

You know, you can’t run any system without planning,” he said. “You can’t accuse us of having too many plans. You need to have plans if you are to perform correctly. The reason we are performing well is because of our ability to plan.”

He did, however, confirm that buildings in every province had been identified to assist with the administration of TVET colleges.

Unfortunately for both universities and the various government departments concerned, pressure is mounting to find a solution. The vice-chancellor body USAf (Universities South Africa) has said an 8% increase is the bare minimum required to avoid placing up to 17 universities in financial distress. This should come from state subsidies, private funding and student fees, USAf said in a statement.

But universities – including the University of Pretoria – have complained that even with an 8% fee increase, they will struggle to maintain standards; University of Cape Town vice-chancellor Max Price said earlier in August that the increased costs of insourcing meant the university needed a fee increase that exceeded the inflation rate. UP says it faces a shortage of about R100-million if there were not to be an 8% increase. Wits vice-chancellor Professor Adam Habib, meanwhile, has said that private sector donations declined from R51-million in 2010 to R37-million in 2015.

And the ANC has added fuel to the fire by recommending no fee increases for students in 2017.

The ANC’s recommendation that the university fee freeze of 2016 be extended indefinitely fails to recognise the financial situation of universities — 17 of which are expected to run into the red even if their income rises in line with inflation next year,” Financial Mail columnist Claire Bisseker wrote earlier in August.

The South African Union of Students (SAUS) has warned that if the commission – which was set in motion by President Jacob Zuma at the beginning of the year – did not conclude its business by September, the country’s campuses would face renewed protests. This is in spite of the extension granted to the commission, which was initially given eight months but had its deadline extended to July 2017 at the request of Justice Jonathan Heher.

At the moment, the commission is nowhere near concluding its investigation. Although it has already gone through close to 200 submissions by various stakeholders, the public hearings scheduled to take place across nine cities are scarcely halfway. The second half of the hearings were planned for East London, Cape Town, Bloemfontein and Kimberley.

Government, meanwhile, is sending mixed messages – probably originating in a certain degree of panic – that are unlikely to find favour with students. Minister in the Presidency Jeff Radebe has said that higher education and training is an “apex priority”, but Michael Sachs, head of Treasury’s budget office, recently admitted that the National Treasury had not allowed for zero tuition increases in its budget.

Prospects for economic growth are limited and Treasury forecasts that state debt will amount to R2.3-trillion by 2018,” Sachs said. “It will be difficult to channel money to higher education from elsewhere.”

Treasury had already been forced to redirect R16-billion meant for delivery of other services last year, Sachs added. Nzimande, meanwhile, has called for a 6% fee increase in line with inflation.

Worryingly for universities, however, debt from students is ballooning, meaning that even with a fee increase, there is no guarantee they will actually receive the expected funds. Director-General in the Department of Higher Education and Training Gwebinkundla Qonde earlier told the commission that following #FeesMustFall it had become increasingly difficult to recover fees.

It is likely that the 2016 student debt will increase… [some universities are reporting that] in the wake of the #FeesMustFall campaign, it is harder to recover fee payments from students, including from wealthy students. Three universities have requested approval for overdrafts as they are experiencing shortfall,” Qonde said.

For some universities, Qonde added, expenditure had simultaneously increased by over 20%, with the main driver of increased costs being staffing. Although the lion’s share of expenditure was going to hiring more staff at a number of campuses, the student-lecturer ratio was nonetheless getting worse. This was a result of campuses not being able to keep up with the increase in student numbers, said Qonde. In 2014, five universities had incurred operating deficits and seven had incurred operating deficits in council-controlled funds in the same year.

Critics have added that zero increases are ultimately inequitable, since despite calming protests in the short term, a fee freeze would eventually mean tertiary education was simply a boon for wealthy students, but public funding of such a system would still place pressure on the country’s poor, as well as reducing universities’ capacity to provide financial aid.

A number of submissions – including that of UCT – are calling for a tiered fee system, where richer students subsidise poorer ones. But, says the South African Students’ Congress (Sasco), even this is not feasible, since the number of poor students is increasing too rapidly for the wealthy minority to support.

While this is a sound principle, the reality is that the quantum of need is such that the number of poorer students is growing rapidly, and that the ‘missing middle’ is similarly expanding, while the number of students able to pay fees is decreasing,” Sasco said. According to Sasco, the best option to replace fees was public investment, for which the president would ultimately be responsible.

In the meantime the country’s universities are floundering, and their students are growing impatient. For them, and for the future of the economy, it’s essential to find a way to send graduates with valuable skills into the job market, regardless of their financial circumstances. Achieving that before the commission concludes, however, appears unlikely. DM

Photo: #FeesMustFall protest in front of Parliament, 21 October 2015. (Shaun Swingler)

Gallery

Please peer review 3 community comments before your comment can be posted

X

This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.


Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options

Become a Maverick Insider

This could have been a paywall

On another site this would have been a paywall. Maverick Insider keeps our content free for all.

Become an Insider

Every seed of hope will one day sprout.

South African citizens throughout the country are standing up for our human rights. Stay informed, connected and inspired by our weekly FREE Maverick Citizen newsletter.