South Africa


Funding flaws and dreams deferred at South Africa’s universities: We need a long-term solution

Funding flaws and dreams deferred at South Africa’s universities: We need a long-term solution
Students from the University of Cape Town (UCT) gather to protest against financial exclusion on Friday 12 March 2021. (Photo: Leila Dougan)

Universities as institutions of higher learning should be left to their core business, which is teaching and learning. The attempt annually to get institutions to ‘manage’ accumulating student debt will lead to an erosion of the key resources required for a quality education for all, all of which will affect working-class and historically disadvantaged students even more.

Prof Shireen Motala is the South African Research Chair in Teaching and Learning in the Faculty of Education, University of Johannesburg.

Since the advent of democracy in 1994, the South African government has relentlessly pursued equity in education, despite increasingly limited public finances. While discrimination in social spending has reduced, with race no longer a criterion, inequalities remain because of the high costs of achieving fiscal parity in education.

In higher education, slowly growing fiscal inputs are not translating into greater efficiency and quality outcomes. As such, questions persist about whether the current approach to equity is adequate, and whether differential redistribution that favours the underprivileged has taken place.

The slow progress towards equity was brought into sharp focus by the widespread #FeesMustFall protests in 2015 and 2016, and again in early 2021 about the affordability of higher education. Students have sought to challenge current ideologies and put their concerns of accessibility of higher education, decolonisation and academic freedom firmly on the transformation agenda through protests demanding access to tertiary education. This is partly because most of them qualify on academic merit, which underlines that the principle of equality of opportunity should be maintained.

When the protests flared again in March this year it appeared yet again that the next generation of students who, having achieved senior certificate results in 2020 to enter tertiary education, were to have their dreams deferred. Higher education minister Blade Nzimande’s announcement on 15 March 2021, that the National Student Financial Aid Scheme (NSFAS) would not be able to fund all new and returning students was the catalyst that reignited the protests. In a pandemic-struck world, new priorities emerged, leading to a reduction of R6.8-million in the allocation to NSFAS, and R5-billion less in university subsidies.

As the protests escalated, Nzimande announced that Cabinet had decided to appoint a committee to look into a sustainable model of financing for the higher education sector. The announcement of yet another commission — coming after several years in which a number of commissions of inquiry had deliberated and made a number of forward-looking and sound proposals — seemed yet again to defer decisions. Effective alignment and coordination between the tertiary sector, DHET and Treasury appeared shaky, and once again, it seemed that short-term solutions for 2021 was the way forward.

In the past several years, a number of task teams have been established in South Africa, including ministerial task teams and commissions that have addressed the chronic underfunding of higher education. These include teams led by Deputy President Cyril Ramaphosa (2012), Prof Derrick Swartz, Vice-Chancellor of NMMU (2013), Dr Sizwe Nxasana, Chairperson of NSFAS and the CEO of FNB (2015) and the CHE (2016). In November 2015, amid nationwide student protests on fees and funding, then-president Jacob Zuma appointed Judge Heher to lead a commission to investigate the funding of fee-free higher education.

Alongside these processes, independent researchers, civil society organisations, Universities South Africa (USAf), NSFAS and a number of tertiary institutions have contributed to a significant body of knowledge on the funding issues. The current mechanisms for dispensing student financial aid are again under intense scrutiny. The relationships between poverty, access to quality education and societal change have put systemic issues into sharp focus.

There have been a number of substantive proposals on the table, including a review of the NSFAS funding model, an increase in the tax base to include a graduate tax or a notional loan scheme payable on employment, wealth tax, corporate tax, and an increase in the skills levy. What there is unequivocal consensus on is that the revised funding model must be based on a social justice approach. Simply put, no academically achieving and deserving student must be excluded from university because they cannot afford it. Publicly funded tertiary education for the poorest in our society, who meet the criteria for academic merit, must be available as soon as possible. There is also agreement for a full-cost provision for the neediest students which includes accommodation, food and books.

The Heher Commission report on 13 November 2017 concluded that fee-free higher education was not feasible in the foreseeable future. The gist of the commission’s proposal was on the implementation of the income-contingent loan (ICL), proposing a partnership between universities and banks to release funds to students on a low-interest means-tested model. On 16 December 2017 then-president Zuma, just over a month after the release of the Heher Report, announced that as of January 2018, all academically eligible students would receive fee-free university education. Zuma did accept the Heher recommendation that funding for higher education should increase from 0.68% of GDP to 1% within five years.

However, this has not taken place and has contributed directly to the current situation. Students, parents and universities, and indeed all stakeholders, have anticipated that this proposal would be implemented and contribute to the stability of the current funding of higher education. Instead, as Professor Ahmed Bawa, CEO of USAf has observed, there “has been a steady decline in subsidies for students over the past 10 to 12 years”. A common view is that only when government is pushed by social action (as led by the South African Union of Students in 2021) resolution follows, calling into question the maturity of the system.

The current context that we find ourselves in is that growing the economy is not possible without a concomitant growth in human capacity at all levels, including for research and university education. We require this to build the knowledge economy, to be locally and globally competitive and most importantly to give young people meaningful opportunities in further study or in the labour market. Some of the funding issues, illustrated by systemic and institutional fault lines, precipitated the student unrest last month. Because of Covid-19 reprioritisation, there were questions about whether new students who had been given spaces for further tertiary study would be given NSFAS funding, and whether returning students who had accumulated historic debt would be allowed to return.

Universities were faced with an even higher debt burden especially from the missing middle group, rising to R14-billion with some institutions such as Wits University being owed about R1-billion. In terms of the current model, students whose combined household income is less than R350,000 per annum are eligible for NSFAS funding. It is those students who are just above this threshold who accumulate historical debt and are unable to register. As Professor Pierre de Vos noted recently, these students are now in danger of being left behind, which points to the increasing impoverishment of “lower-middle-class” households, highlighting heightened class polarisation.

While the higher education student dropout norm is expected to be 20% in South Africa, in reality it is much higher than this, rising to 40% or higher in some institutions. The throughput, among higher education institutions, reflects somewhat inefficient usage of resources and contributing to social instability as the dreams of young people are deferred and futures uncertain.

Two other issues have emerged. It continues to be unclear whether the change in VAT from 14% to 15 % and the earnings derived from this (as it was intended for higher education) vs actual allocation to higher education. The second relates to monies identified regularly by the Auditor-General and others as monies lost due to irregular expenditure. Ironically, in the era of the Fourth Industrial Revolution, NSFAS has also faced bureaucratic problems, including late disbursements, creating difficulties for universities in terms of planning. Inexplicably in an environment of Covid-19 and job losses, the NSFAS budget was cut for the 2021 academic year.

Universities as institutions of higher learning should be left to their core business, which is teaching and learning. The attempt annually to get institutions to “manage” accumulating student debt will lead to an erosion of the key resources required for quality education for all, a declining infrastructure and facilities, higher staff: student ratios, reprioritisation and difficult choices to support teaching and learning within a constrained fiscus, all of which will affect working-class and historically disadvantaged students even more.

The fault lines and fatigue across the higher education system are evident, as we face the annual scenario of parental and student aspirations and expectations against the spectre of a constrained fiscus. We require a comprehensive and long-term solution that accommodates poor and working-class students and implements a clear plan for the missing middle group of students. The income-contingent loan model, which has had success in other countries, needs to be put back on the table, requiring detailed planning and rollout between the public and private sectors.

Finally, as highlighted in 2019, the funding of all students, including those at postgraduate level, needs to be planned for, especially if we want to contribute to a high-skills, high-growth knowledge economy, and create a better society for all. Innovative online education models that recognise the twin imperatives of access and quality must receive consideration. This is in line with the University of Johannesburg’s Fourth Industrial Revolution drive. DM


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