News Post

Fees must fall, but who will pick up the bill? Here are our options

Dec 07 , 2017

The storm clouds above South Africa’s universities could be dissipated with careful fiscal planning.

A report into the feasibility of offering free higher education at South Africa’s universities has finally been released.

It has been nearly two years in the making, developed by a commission of inquiry that President Jacob Zuma set up in response to nationwide fee protests.

The lengthy report provides an accurate diagnosis of the state of higher education funding, as well as the problems it faces. But its proposed solutions are problematic.

Many of its limitations arise from a failure to properly integrate an understanding of public finance and public economics into the analysis and recommendations.

The Commission’s report gets two critical things right – even though neither will please student activists. The first is that planned student numbers are simply too high and should be revised downwards. The second is that the country simply can’t afford free higher education for all students given its other priorities and weak economy.

But its recommendations are poor. Models are proposed that represent, I would argue, a significant step backwards from scenarios developed by the Department of Higher Education and Training two years ago.

The department’s scenarios are indirectly supported in another report that’s just been released, by the Davis Tax Committee.

The tax committee endorses a hybrid scheme for higher education funding.

This would retain and increase grants for poor students’ university fees.

It would use loans to fund the “missing middle” – students from households that earn too much to qualify for government funding but still can’t afford higher education.

If South Africa’s concern is really about immediate improvements in equitable access to higher education for poor students, this is the option that should be receiving the most attention.

The Fees Commission report

I have argued previously that one reason for the current state of affairs has been excessive student enrolment, relative to appropriate standards and adequate resources. Yet various policy documents propose rapid increases to enrolment in the coming decades.

The fees commission correctly argues in its report that these projected enrolment numbers are unrealistic. It points out that such high student numbers threaten quality and make adequate funding even more unlikely. It recommends that the numbers be revised downwards.

The commission also does well in recognising that – given the state of South Africa’s economy, public finances and other important government priorities – free higher education for all – or even most students – is simply not feasible or desirable.

It rejects both the possibility of fully funded higher education and the demand for university fees to be abolished.

But it endorses the abolition of application and registration fees, along with regulation of university fees.

There are three critical issues within the current student funding system.

What household income threshold should be used to determine student eligibility for support from the National Student Financial Aid Scheme (NSFAS) to ensure all students who need partial or full support are covered?

What resources are needed to ensure that all students below the threshold receive the adequate funding; up to full cost where necessary?

How should the support provided be structured in terms of grants versus loans, or combinations [...]