Between State Capture and power outages, the Mid-Term Budget was hardly a surprise.
And anyway, those of us working in universities have already been feeling the pinch for some time because last-minute cuts on approved grants and clawing back interest on investments are already happening.
These practices echo the ways in which historically black universities were funded in the past. They were not allowed to invest and had to return unspent funds each year, resulting in poor financial management, lack of long-term planning, and regular instances of fiscal dumping. We now seem to be returning to such practices.
The long-term consequences of budget cuts will include the inevitable freezing of posts and neglect of infrastructure. But the effects will be felt by many more than university staff and students.
Universities bring significant benefits to a country, because having educated people drives the economy. But the benefits go far beyond this to include the strong relationship between an educated critical citizenry and democratic stability. Universities are subsidised by the state because they are meant to be a public good. Having a strong higher education sector should be good for everybody, including those who never set foot on a campus.
While every sector is battling in our flailing economy, it is worth looking more closely at why higher education in particular is tightening its belt.
In 2015, the National Student Financial Aid Scheme (NSFAS) cost about R5-billion, by 2021 this had jumped to R31-billion, and next year it will sit at around R42-billion. This means that more money goes to this social grant than to the block grant that funds universities.
This is entirely unsustainable. And if this grant gives students access to poorly staffed and run-down institutions, it is hardly money well spent.
NSFAS is an obvious good. It provides fees, accommodation, books, and meals for students who could not access university without it. But this grant has been funded from within the Treasury’s allocation to higher education — and thus depleted the resources for the sector as a whole.
While some part of NSFAS funding returns to universities in the form of fees, much of it is a social grant to students to cover their living costs.
That this grant greatly exceeds the Sassa SRD grant and other social grants provided by the state means that many students support their whole family on their NSFAS funding.
Corruption in the management of NSFAS makes this sorry picture even more dire.
And it is in this context that the minister continues to speak about building two brand-new universities. The policy incoherence is matched only by the financial unfeasibility. With 2024 being an election year, perhaps the sustainability of NSFAS and the funding of new universities is of little concern compared to the garnering of votes.
But in the long term, all South Africans pay the price of budget cuts in the higher education sector. DM