tag:theconversation.com,2011:/africa/topics/free-higher-education-12995/articlesFree higher education – The Conversation2018-02-27T15:21:17Ztag:theconversation.com,2011:article/921932018-02-27T15:21:17Z2018-02-27T15:21:17ZThe case against free higher education: why it is neither just nor ethical<figure><img src="https://images.theconversation.com/files/207289/original/file-20180221-132647-1ki41rf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Those demanding free higher education don't realise this would be a regressive policy.</span> <span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span></figcaption></figure><p>South Africa’s just-ousted Minister of Finance committed another <a href="http://www.treasury.gov.za/documents/national%20budget/2018/speech/speech.pdf">R57 billion</a> to higher education and training over the next three years. In his first (and last – he was removed from the portfolio less than a week later) budget speech, Malusi Gigaba followed through on former president Jacob Zuma’s <a href="https://www.news24.com/SouthAfrica/News/zuma-announces-free-higher-education-for-poor-and-working-class-students-20171216">controversial promise</a> in December last year of fee-free higher education. </p>
<p>The minister’s announcement is likely to be well-received by those who have supported <a href="https://edition.cnn.com/2015/10/27/africa/fees-must-fall-student-protest-south-africa-explainer/index.html">the demand</a> by relatively small student groups that “Fees Must Fall”. Yet there is a major fault that is ignored by those who favour free higher education. It fails to provide a justification for increased allocation of resources to higher education on the grounds of equity or social justice. </p>
<p>There are <a href="http://www.chet.org.za/presentations/university-cape-town">persuasive</a> <a href="http://www.universityworldnews.com/article.php?story=20160223145336908">arguments</a> that free higher education will be <a href="http://www.universityworldnews.com/article.php?story=20150605131029778">unambiguously regressive</a>. This is because it involves a transfer of resources from lower to higher income individuals within a national population.</p>
<p>This has been evident in certain other African and South American countries, as well as in Western Europe. Some countries do offer free tertiary education. Germany and Norway are current examples. But, first, they are rich in per capita income terms. And, second, “free” is ambiguous because it covers only selected components and not the full cost of this level of education.</p>
<p>Free higher education must be judged inherently regressive. It <a href="http://www.universityworldnews.com/article.php?story=20160223145336908">certainly will contribute</a> to South Africa’s <a href="https://theconversation.com/factcheck-is-south-africa-the-most-unequal-society-in-the-world-48334">already high inequality</a> by international standards. </p>
<h2>From a social justice perspective</h2>
<p>To understand the social justice dimensions of the question requires that attention be paid to the end of the process of higher education, the outcome, not the beginning when the focus is on costs and who bears them.</p>
<p>The bulk of graduates in every higher education system enter the labour force’s upper echelons. This places graduates well up in the top 10% to 15% brackets of the national distribution of earned income. </p>
<p>Most significant from a social justice perspective, university graduates receive considerably more income than the median taxpayer, or those within the median tax bracket, who inhabit the middle of the array of taxable income levels in every country.</p>
<p>This observation applies to <em>direct</em> taxation: personal income tax, company or corporate tax, wealth taxes and estate duty levied on individuals or corporate entities. But the regressive nature of the income transfer to university graduates is even more striking when attention is directed to <em>indirect</em> taxation. Examples include VAT, fuel levies, import and excise duties and a large set of user charges. </p>
<p>Indirect taxes are not levied directly on liable persons or their income generating entities like companies and corporations. Yet ultimately such taxes are paid by all consumers, irrespective of their levels of income, because they are paid by entities who are not individual consumers. This makes them regressive: <em>everyone</em> in South Africa will pay 15% VAT and a higher fuel levy from now on, in line with the <a href="http://www.treasury.gov.za/documents/national%20budget/2018/speech/speech.pdf">2018 budget speech</a>.</p>
<p>Regressive transfers financed by the state – taking from taxpayers and giving to students in the form of free higher education – is the main reason why international examples of free higher education are so few and far between. That is why the <a href="https://jhupbooks.press.jhu.edu/content/financing-higher-education-worldwide">international literature</a> is generally sceptical – even hostile – to demands for free higher education. </p>
<p>One example widely cited is Australia where free higher education was decisively rejected in recent times. When a student loan scheme was under debate there about 20 years ago, the opponents of free higher education coined the slogan: <em>Why should bus drivers pay for the education of lawyers?</em> Why indeed? Today Australia possesses one of the world’s <a href="https://theconversation.com/factcheck-does-australia-run-one-of-the-most-generous-student-loan-schemes-in-the-world-52696">most successful</a> national student loan schemes.</p>
<h2>Social justice matters</h2>
<p>In the real world of course, there are individual students who fall through the net and do not graduate. They miss out on becoming high-earning members of a national labour force. Consequently, a number of once enrolled students end up burdened by debt obtained while studying, either from private sector sources like banks or from the state under a tertiary education loan system.</p>
<p>But these individuals, together with entering higher education students from poor households who are eligible for subsidy from state sources in many countries, must be treated as <em>personal</em> cases. They are judged legitimate or not legitimate candidates for free higher education provided by government. </p>
<p>Each individual case has to be decided on its own merits. But when viewed as a <em>group</em>, usually small in number compared to total enrolment, they certainly do
not constitute a justification for free higher education throughout a given national system.</p>
<p>Another issue that should be a serious concern is that fiscal authorities in a country short of revenue simply cut the allocation to post-school education - universities and technical and vocational colleges. This has been the case for many years in South Africa, and happens because universities and post-school colleges are not an important constituency in the competition for resources. </p>
<p>This has led to <a href="https://chet.org.za/resources/sustainable-higher-education-funding-and-fees-south-africa">chronic underfunding</a>, a fact which has not been recognised by “Fees Must Fall” and free education activists. This is highly likely to continue as a major problem in the future if higher education is held to be nominally “free” in publicly stated policy.</p>
<p>If there are circumstances specific to South African higher education which might justify a claim for more resources to be devoted to post-school education, then these circumstances must be explained upfront and in detail. Thus far no “Free Education Planning Groups” at universities appear to have done so.</p>
<p>Every university has a responsibility to clarify the values by which it functions. This is a responsibility to all its members, as well as to the concerned public outside. The neglect of social justice in South Africa’s ongoing free higher education debate is highly surprising. It is also undermining of the values that must be explicit in the public sector allocation of resources.</p><img src="https://counter.theconversation.com/content/92193/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sean Archer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The ethical and political reasons to avoid free higher education are unambiguous.Sean Archer, Research associate, School of Economics, University of Cape TownLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/922212018-02-21T16:00:27Z2018-02-21T16:00:27ZSouth Africa’s budget: first steps towards a recovery, but at what cost?<figure><img src="https://images.theconversation.com/files/207294/original/file-20180221-132680-hysur8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South African Finance Minister Malusi Gigaba is trying to spearhead a more stable economic landscape.</span> <span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span></figcaption></figure><p>The <a href="http://www.treasury.gov.za/documents/national%20budget/2018/speech/speech.pdf">2018 Budget</a>, presented by Finance Minister Malusi Gigaba in Parliament, lays out the painful consequences of the country’s public finances for South Africans.</p>
<p>The National Treasury’s proposal of an increase in Value Added Tax (VAT) – a tax applied to most items consumers buy – from 14% to 15% is the most dramatic of these consequences. Because it’s a tax paid by all citizens, putting it up by 1 percentage point raises concerns about the negative effects on the poorest households. </p>
<p>The Budget also proposes that tax brackets for the highest-earning 1 million taxpayers will not be adjusted for inflation, which effectively increases income taxes for these taxpayers.</p>
<p>Another sign of the distress the country’s finances are in came in the form of proposed cuts to government infrastructure spending, especially at local and provincial government level. The need for expenditure cuts is exacerbated by the fact that the budget supports former president Jacob Zuma’s commitment to provide <a href="https://www.news24.com/SouthAfrica/News/zuma-announces-free-higher-education-for-poor-and-working-class-students-20171216">free higher education</a> for a greater number of students. The minister said that the policy would be phased-in, with the Budget indicating that the cost rises from R12bn to R24bn over the next three years. But there are reasons to believe the cost <a href="https://theconversation.com/free-higher-education-in-south-africa-cutting-through-the-lies-and-statistics-90474">could be higher</a>. </p>
<p>Whether measures announced by Gigaba will stave off a downgrade of South Africa’s local currency debt by the one remaining rating agency remains to be seen. While the ascension of Cyril Ramaphosa to <a href="http://ewn.co.za/2018/02/15/watch-live-ramaphosa-to-be-sworn-in-as-sa-president">the presidency</a> has provided hope that pressure on public finances will be reduced by the state being better managed, it will take years to significantly improve the current situation.</p>
<h2>A substantial shift</h2>
<p>In October last year Gigaba painted a grim picture of South Africa’s public finances in the 2017 <a href="http://www.treasury.gov.za/documents/MTBPS/2017/mtbps/FullMTBPS.pdf">Medium Term Budget Policy Statement</a>. With an expected R50bn shortfall in tax revenue he indicated that national debt would increase rapidly – contrary to repeated earlier promises to “stabilise” debt levels. </p>
<p>The 2018 Budget reflects a substantial shift from this position. The new plan is to return to a strategy of “debt consolidation”: reducing the speed at which national debt increases relative to the size of the economy, so that within a few years it begins to decline. </p>
<p>Debt will still increase to levels higher than promised in numerous previous budgets, but significantly slower than suggested in October. Reducing the rate at which the government borrows requires raising more money from taxes and decreasing planned government expenditure. But this is even more difficult to do because of Zuma’s announcement of “free higher education” – which happened after the medium term budget statement. </p>
<p>Essentially, expanded free higher education means a combination of more taxes, more spending and more borrowing.</p>
<h2>Some notable proposals</h2>
<p>It is important to remember that, <a href="https://www.parliament.gov.za/storage/app/media/PBO/act-9-2009-money-bill-amendment-procedure.pdf">by law</a>, the budget is actually a set of proposals – even though the National Treasury and Minister of Finance almost always get their way. The <a href="https://theconversation.com/explainer-the-nitty-gritty-of-south-africas-annual-budget-72901">proposals are only fully legally binding once they have been approved by Parliament</a>. If citizens are not happy with certain proposals there are still opportunities in Parliament to challenge them. </p>
<p>Some of the proposals that deserve attention are: </p>
<p><strong>1. The impact of VAT increase:</strong> Of all the major taxes available, VAT is the least “progressive”. It is paid to a much greater extent by the poor and vulnerable than personal income tax or corporate tax. It is arguably for this reason, in the context of South Africa’s <a href="https://theconversation.com/south-africa-needs-to-fix-its-dangerously-wide-wealth-gap-66355">high rates</a> of income and wealth inequality, that VAT has <a href="https://www.pwc.co.za/en/assets/pdf/vat21-september-2012.pdf">not been increased</a> since 1994. </p>
<p>The increase has been defended on the grounds that other options (personal and corporate income tax) are increasingly strained and VAT is the least harmful to economic growth. The claim about economic growth is debatable: it depends on assumptions about how the economy works. And although the budget claims that social grants have been increased to try and offset the negative impact, the overall effect remains unclear. It seems likely that most poor households will experience additional hardship.</p>
<p><strong>2. Free higher education:</strong> The budget repeatedly states that the costs of Zuma’s free higher education announcement “remain uncertain”. This is strange and probably reflects the fact that Zuma violated normal budget protocol by almost unilaterally announcing the policy change without adequate consultation or analysis of the likely costs. Nevertheless, it is surprising that the budget does not provide more detail.</p>
<p>The budget indicates additional government expenditure of R12.4 billion in 2018/19, increasing rapidly to R20.3 billion in 2019/20 and R24.3 billion in 2020/21 as the policy is rolled out beyond just first year students. But these numbers look optimistic. Treasury does not explain what it has assumed about the number of students needing support and how much support will be provided.</p>
<p><strong>3. Expenditure cuts:</strong> The budget proposes R85 billion in cuts to planned government spending over the next three years. It’s hard to tell what the implications of spending cuts really are just from looking at the numbers and explanation in the budget. Nevertheless, a couple of things are clear. </p>
<p>Firstly the cuts affect infrastructure spending in particular: about R40 billion is cut. In some ways this is understandable. But it’s also dangerous because these decisions seem, for now, less harmful than they really are. That’s because South Africa’s economic and social infrastructure is already a matter of concern and the additional negative consequences of underspending will only be noticed years down the line.</p>
<p>Secondly the cuts are targeted at provincial and local government: R28 billion will be cut in grants given to local and provincial governments for various infrastructure programmes. This is also concerning given the importance of service delivery at these levels.</p>
<h2>The gaps</h2>
<p>The National Treasury needs to provide more information on why the decision was taken to increase VAT, and what the implications are likely to be. This is important because the move raises concerns about the effects on poorer and more vulnerable South Africans.</p>
<p>A detailed explanation of the likely costs of the proposed policy to expand free higher education also needs to be provided. The absence of this information raises concerns about whether Treasury has allocated enough money for this policy and, if not, whether universities may be left to deal with the consequences of insufficient funding for students who have been promised free higher education.</p>
<p>Finally, the attitude of the National Treasury in recent budgets has been that provinces and municipalities simply need to become more efficient and must fulfil their obligations with fewer resources. But what if that’s not possible? The Treasury can’t wash its hands of the negative consequences of cuts to critical areas of service delivery.</p>
<p>In conclusion, the Budget represents progress since last year when Zuma and his cabinet effectively sat on their hands and refused to take any difficult decisions. At least proposals have now been made to stabilise the national debt. Whether they represent the best solutions to our public finance challenges is a matter for public debate.</p><img src="https://counter.theconversation.com/content/92221/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Seán Mfundza Muller has received funding support from the Heinrich Böll Foundation and is part of an European Union-funded project to build the capacity of South African civil society to engage with legislatures. In these and related projects he advises various civil society groups on public finance issues.</span></em></p>Whether measures announced by Gigaba will stave off a downgrade of South Africa’s local currency debt by one remaining rating remains to be seen.Seán Mfundza Muller, Senior Lecturer in Economics and Research Associate at the Public and Environmental Economics Research Centre (PEERC), University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/904742018-01-24T13:53:46Z2018-01-24T13:53:46ZFree higher education in South Africa: cutting through the lies and statistics<figure><img src="https://images.theconversation.com/files/202804/original/file-20180122-46251-1j5aock.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The fight for free university education in South Africa is entering its fourth year.</span> <span class="attribution"><span class="source">Reuters/Siphiwe Sibeko</span></span></figcaption></figure><p>Public discussion about higher education funding in South Africa has been beset by numerous fictions and misunderstandings since the Fees Must Fall movement emerged in 2015. These have been compounded by the political opportunism of President Jacob Zuma and his advisors. </p>
<p>In mid-December 2017, with <a href="https://www.businesslive.co.za/bd/national/education/2017-12-16-breaking-news-zuma-blindsided-treasury-in-free-higher-education-decision/">relatively little consultation</a> or planning, Zuma <a href="http://www.presidency.gov.za/press-statements/president%E2%80%99s-response-heher-commission-inquiry-higher-education-and-training">announced</a> that in 2018 free higher education would be provided to all new first year students from families that earn less than R350,000 per year. </p>
<p>Having participated in the <a href="http://www.che.ac.za/sites/default/files/publications/CHE_South%20African%20higher%20education%20reviewed%20-%20electronic_0.pdf">20-year review of South African higher education</a> in 2013, advised parliamentarians on different funding proposals in 2015, and <a href="https://theconversation.com/options-on-the-table-as-south-africa-wrestles-with-funding-higher-education-87688">engaged</a> with a report by the commission Zuma set up to examine fee structures, it’s become apparent to me that it is critical to debunk a number of prevalent myths around higher education funding.</p>
<p>The current public “debates” contain many myths or misconceptions about what free tertiary education would mean, ranging from the implications of free higher education proposals for poverty and inequality to the feasibility of funding such proposals. Unless these myths are unmasked the free higher education debate will remain misguided and likely lead to very different, negative outcomes.</p>
<p>In many respects, Zuma’s free higher education proposal is the worst kind of populism. It’s been sold as a radically progressive policy that can be achieved with no negative consequences. But it will actually do very little for the neediest South Africans. And it could have negative consequences for the stability and progressiveness of public expenditure. </p>
<h2>Busting myths</h2>
<p><strong>Myth 1: Spending on higher education is about helping the poor</strong></p>
<p>When the Fees Must Fall movement emerged, it insisted its fundamental demands were based on concern for poor South Africans. The movement argued that this group was effectively excluded from higher education or disadvantaged in their studies because they could not afford the fees and other costs of studying. </p>
<p>The idea that the movement for free higher education is based on a concern for poor youth is clearly absurd when you consider that <a href="https://theconversation.com/south-africas-feesmustfall-protests-some-inconvenient-truths-67516">only 5%</a> of South Africans aged between 15 and 34 are students in universities, while 34% are unemployed. </p>
<p>A recent, comprehensive evaluation by South African and international academic economists for the World Bank, examined the effect of government spending and taxation on inequality. Using data on who pays taxes and who benefits from different kinds of public spending, it <a href="http://www.econ3x3.org/article/how-much-inequality-reduced-progressive-taxation-and-government-spending">found</a> that higher education was the least progressive of all social expenditure. It did the least to reduce inequality, since higher education benefits only a very small proportion of the population and those who do benefit tend to come from wealthier households than the vast majority of South Africans. </p>
<p><strong>Myth 2: There are no consequences for increasing taxes or increasing borrowing</strong></p>
<p>Even if higher education is not the most progressive way to use public money, some supporters of free higher education have argued that it could be more progressive than existing studies suggest – provided the money is raised from wealthier South Africans. </p>
<p>Strictly speaking, this is true. The problem is that supporters of Fees Must Fall have written about possible ways of raising revenue as if the money is effectively free. Proposals such as “double the <a href="http://www.sars.gov.za/TaxTypes/SDL/Pages/default.aspx">skills levy</a> on companies” or “increase income taxes” are empty; they fail to address the negative consequences of tax increases. </p>
<p>A higher skills levy, paid by firms to fund national training initiatives, means lower profits for firms and potentially less investment. Higher income taxes could lead to greater tax avoidance measures, shifts in how employers remunerate employees, or a reduction in people’s working hours. All these could lead to revenue decreasing. Such dynamics need to at least be taken into account when tabling such proposals. But this has not happened. </p>
<p>The result could be a reliance on taxes, <a href="https://www.businesslive.co.za/bd/economy/2017-11-13-news-analysis-vat-hike-essential-to-plug-hole-in-revenue/">like VAT</a>, that are harder to avoid because they are paid by the vast majority of South Africans. There’s a perverse consequence to all this: “free higher education” could actually increase inequality.</p>
<p>This myth-making has recently been compounded by Zuma’s proposal and its advocacy by one of his advisors, Morris Masutha. </p>
<p><strong>Myth 3: Free higher education will reduce youth unemployment and save on future social spending</strong></p>
<p>Masutha claims that free higher education <a href="https://www.enca.com/south-africa/watch-free-higher-education-funds-itself-says-zuma-education-advisor">will “fund itself”</a>, primarily by reducing future social security spending on social grants and government-built houses. He insists that abolishing fees will lead to higher economic growth. </p>
<p>Given the <a href="http://resep.sun.ac.za/index.php/lmip-conference-presents-new-view-on-challenges-of-tertiary-education-in-sa/">tiny proportion</a> of poor youth who can access higher education through their basic education results, the claim about social expenditure is clearly false. </p>
<p>There is a positive relationship between higher education and economic growth. But the current proposal could only “pay for itself” if it produced dramatically more graduates and so increased their economic contribution. There is no reason to believe an effect of that scale is likely and no modelling has been provided to support such claims. </p>
<p><strong>Myth 4: Zuma’s December 2017 proposal is the best way to help poor and needy students</strong></p>
<p>Zuma’s proposal contains two extremely dishonest components: the definition of “poor and working class” students and the limiting of the policy in 2018 to new first year students.</p>
<p>It effectively proposes that in 2018 a first year student from a family earning R340,000 per year will get full government support. But a second year student from a family earning R130,000 will get no support. And a student from the R340,000/year family will get the same support as a student from a R20,000/year family. </p>
<p>This clearly doesn’t prioritise poor students. </p>
<p>A <a href="https://pmg.org.za/committee-meeting/21700/">rough costing</a> by the Department of Higher Education and Training in 2015 suggested that the threshold could be raised to R217,000 per year for all students. This would benefit more needy students and, at an estimated cost of R12.5billion, been far more feasible than what Zuma has proposed.</p>
<p><strong>Myth 5: Zuma’s proposal is feasible because it “only” costs R12billion - R15billion</strong></p>
<p>Current estimates put the cost of Zuma’s proposal in 2018 at between R12 billion and R15 billion. Some commentators have suggested this cost will remain static in future. That is almost certainly false. </p>
<p>It would only be true if such funding was either not extended to students entering universities in 2019 or was taken away from the 2018 cohort. Neither scenario makes any sense. Instead, funding is likely to be extended to second years in 2019 and third years in 2020. That will likely lead to an annual cost of <a href="https://www.news24.com/SouthAfrica/News/no-comment-sachs-says-over-masuthas-fee-free-lying-claim-20180104">R40billion</a> or more. </p>
<p>An increase of R12 to R15 billion <a href="https://www.fin24.com/Economy/fee-free-university-education-regressive-davis-tax-committee-report-20171113">may be affordable</a>. But a R40billion increase is an entirely different proposition.</p>
<h2>Critical decisions</h2>
<p>Thousands of new students are being registered at universities right now. The 2018 Budget is set to be tabled next month with public finances under extreme pressure. Given this reality, it’s critical that all the myths surrounding “free” higher education are laid to rest.</p>
<p>Only then can difficult decisions be taken in the best interests of all South Africans.</p><img src="https://counter.theconversation.com/content/90474/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Seán Mfundza Muller currently provides advice to civil society groups on public finance issues and is involved in a European Union-funded collaboration to increase, and improve, civil society engagement with legislatures.</span></em></p>In many respects, President Jacob Zuma’s free higher education proposal in South Africa is the worst kind of populism.Seán Mfundza Muller, Senior Lecturer in Economics and Research Associate at the Public and Environmental Economics Research Centre (PEERC), University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/638362016-08-12T14:00:00Z2016-08-12T14:00:00ZWhen universities aren’t properly funded, everybody loses<figure><img src="https://images.theconversation.com/files/133920/original/image-20160812-16375-h5yuw4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A year on from South Africa's #feesmustfall protests, funding remains a hot issue.</span> <span class="attribution"><span class="source">Kim Ludbrook/EPA</span></span></figcaption></figure><p>It seems that South Africa’s universities are on <a href="https://www.jacarandafm.com/news-sport/news/south-african-union-students-shut-down-universities/">a knife-edge</a> once more. Its students are ready to march again.</p>
<p>It’s striking that universities find themselves in this position less than a year after the <a href="https://theconversation.com/fee-protests-point-to-a-much-deeper-problem-at-south-african-universities-49456">#feesmustfall</a> protests. These brought the issue of rising student fees – driven by declining government support – to the fore.</p>
<p>South Africa’s Higher Education and Training Minister has <a href="http://www.bdlive.co.za/national/education/2016/08/12/blade-nzimande-meets-students-about-2017-university-fees">indefinitely postponed</a> making a highly anticipated announcement about university fees. Dr Blade Nzimande was scheduled to make an “important announcement” at a press briefing on August 12. Instead, he cancelled his briefing after meeting with students.</p>
<p>Students weren’t impressed by their interactions with Nzimande. Members of the SA Union of Students say they will <a href="https://www.jacarandafm.com/news-sport/news/south-african-union-students-shut-down-universities/">shut down universities</a> from August 15. They’re unhappy with Nzimande’s proposals for the 2017 fee cycle and the work that’s being done by <a href="http://www.justice.gov.za/commissions/FeesHET/docs.html">a commission</a> President Jacob Zuma established to investigate fee structures in higher education.</p>
<h2>Drivers for change</h2>
<p>These events bode ill given the important role that universities play in the country’s economy. In 2009 they contributed more than <a href="http://sajs.co.za/sites/default/files/publications/pdf/Inglesi-Lotz_Commentary_0.pdf">R87 billion</a> (about US$6.5 billion at current rates) to the economy and accounted for approximately 2.1% of <a href="http://sajs.co.za/sites/default/files/publications/pdf/Inglesi-Lotz_Commentary_0.pdf">gross domestic product</a> (GDP). Universities are responsible for more than <a href="http://sajs.co.za/sites/default/files/publications/pdf/Inglesi-Lotz_Commentary_0.pdf">150,000</a> jobs, both directly – academics and support staff – and indirectly through service providers.</p>
<p>University graduates often enter into well-paying jobs, increasing the number of taxpayers. This is an important imperative in a country that struggles with a <a href="https://books.google.co.za/books?id=kJcwCgAAQBAJ&pg=PA99&lpg=PA99&dq=narrow+taxpayer+base+south+africa&source=bl&ots=rWltp2PH7u&sig=SuSkJP-1byfQuQfele19N2pIwjc&hl=en&sa=X&ved=0ahUKEwiH99zpsrvOAhWrI8AKHQabDogQ6AEIPjAG#v=onepage&q=narrow%20taxpayer%20base%20south%20africa&f=false">narrow base</a> of taxpayers. But it doesn’t stop there. </p>
<p>These graduates tend to be more <a href="http://chet.org.za/books/university-africa-and-democratic-citizenship-hothouse-or-training-ground">democratically</a> engaged. They are <a href="https://www1.oecd.org/edu/innovation-education/37425753.pdf">healthier</a>, more likely to be civically <a href="http://archive.aacu.org/bringing_theory/documents/4civicseries_cecd_final_r.pdf">engaged</a> and less likely to participate in <a href="http://eml.berkeley.edu/%7Emoretti/lm46.pdf">crime</a>. A vibrant higher education sector is essential to developing a thriving society.</p>
<p>Higher education is directly involved in the project of nation-building. Its research and its graduates can grapple with the legacy of apartheid, as well as the country’s institutionalised system of inequality. Universities are important promoters of transformation – increasing representation and access across lines of race, gender and sexuality. In just 20 years, South Africa’s universities have improved <a href="http://www.universitiessa.ac.za/sites/www.universitiessa.ac.za/files/South%20African%20Higher%20Education%20in%20the%2020th%20Year%20of%20Democracy_5%20March%202014_0.pdf">access</a> to black students from 52% in 1994 to 81% as of 2014.</p>
<p>Without sufficient funding, all of this important work is in jeopardy. </p>
<h2>Funding crunch</h2>
<p>South African higher education is funded well below <a href="https://www.oecd.org/edu/Education-at-a-Glance-2014.pdf">Organisation for Economic Cooperation and Development</a> averages. It lags behind other African countries, too. </p>
<p>Currently, the South African government <a href="http://www.treasury.gov.za/documents/national%20budget/2016/review/FullReview.pdf">spends</a> just R68.7 billion on the entire post-school training sector. Of this, expenditure on university subsidies, infrastructure and the <a href="http://www.nsfas.org.za/content/">National Student Financial Aid Scheme</a> amount to 1% of GDP. Organisation for Economic Cooperation and Development <a href="https://www.oecd.org/edu/Education-at-a-Glance-2014.pdf">countries</a> spend <a href="https://www.oecd.org/edu/Education-at-a-Glance-2014.pdf">on average 1.59% of GDP</a> on higher education, with the UK spending 1.23% and Germany spending 1.31%.</p>
<p>This, combined with the fact that South Africa simply does not currently have enough capacity in higher education to meet the demand, is concerning. There are 26 universities to service a population of about <a href="http://www.statssa.gov.za/publications/P0302/P03022014.pdf">54 million people</a>. That’s simply not enough, particularly when you consider that the median age in South Africa is <a href="http://www.statssa.gov.za/publications/Report-03-01-67/Report-03-01-672011.pdf">between 22 and 25</a>.</p>
<p>According to the 2015 Statistics South Africa Mid-Year Population Estimate, 19% of the population falls between the ages of <a href="https://www.statssa.gov.za/publications/P0302/P03022015.pdf">15 and 29</a> – the approximate age range for university attendance. </p>
<p>Comparatively speaking, Canada has 88 universities for a population of 34 million people with a median age of 39.8. In the US, there are more than 100 colleges and universities within the greater Boston area alone. The city has a median age <a href="http://www.bumc.bu.edu/inspir/files/HTML/Boston%20Population%20and%20Demographics.htm">of 31.1</a>.</p>
<p>In a more similar economy, Brazil, the <a href="https://www.cia.gov/library/publications/the-world-factbook/fields/2177.html">median age is 31.1</a> – and there are <a href="http://thebrazilbusiness.com/article/universities-in-brazil">more than 2,300 universities</a>. </p>
<p>The point is that South Africa maintains a large portion of its population at the age and stage where they are looking for and needing university education. But this demand is not being adequately funded in the context of increasing student numbers.</p>
<h2>Increased funding is an investment</h2>
<p>Academics appreciate the difficult situation the government finds itself in with respect to funding. Just 22% of the population pays personal income tax. The pool of public funds remains limited even when corporate income tax, which accounts for an additional 18% of government revenue, is considered.</p>
<p>But the time is right to think outside the box. There are alternative ways to fund higher education in South Africa. </p>
<p>The corporate sector directly benefits from the graduates produced by universities. So it is possible to justify thinking through approaches that include their support. The Wits University Panel on Funding Model(s) for Higher Education in South Africa recently made a submission to the Fees Commission suggesting that a “<a href="http://www.wits.ac.za/media/wits-university/news-and-events/images/documents/Higher%20Education%20Funding%20Panel_30%20June%202016.pdf">hybrid model</a>” is required to solve the problems. Things like wealth management funds, special purpose entities and other financial instruments all offer potential funding sources.</p>
<p>The panel didn’t settle on one approach, making it clear that there are a plethora of options available if creative thinking is applied. Without this sort of thinking the sector’s benefit to South Africa’s economic and social develop is under threat. </p>
<p>We have to stay focused on the fact that to improve funding is to invest in economic growth. Adequately funding South Africa’s universities is an investment in skills development, youth development and social justice. It’s an investment in the nation’s future well-being.</p>
<p>It is time that higher education is seen and treated as a key tool for social justice and as a crucial aspect of South Africa’s developmental strategy. It is time for greater investment in the country’s future – not less.</p><img src="https://counter.theconversation.com/content/63836/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David J Hornsby is affiliated with the Academic Staff Association of Wits University (ASAWU). <a href="http://www.asawu.org.za">www.asawu.org.za</a></span></em></p>Academia is being asked to do less for more, and universities are at financial breaking point. This has implications for all South Africans.David J Hornsby, Associate Professor in International Relations & Assistant Dean of Humanities, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/632332016-08-04T19:39:23Z2016-08-04T19:39:23ZHigher education in South Africa hangs in the balance. Here are four scenarios<figure><img src="https://images.theconversation.com/files/132503/original/image-20160729-25624-9ce37i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Higher education in South Africa is at another crossroads. Students have put pressure on the state to offer “fee-free” education to all following their success last year in securing <a href="http://www.timeslive.co.za/politics/2015/10/23/Zuma-announces-a-0-increase-in-tertiary-education-fees-for-2016">a zero increase in fees for 2015</a>. But the battle over what fee structure is appropriate for the country is far from over.</p>
<p>In the wake of protests, and government’s concession on increases for this year, a presidential fees <a href="http://www.justice.gov.za/commissions/FeesHET/docs.html">commission of inquiry</a> was set up. It is due to release its report by the end of the year. In the meantime universities are braced for student action when government announces its plans for fees in 2016. </p>
<p>All this is happening against the backdrop of an economy that is expected to grow by <a href="https://theconversation.com/south-africa-can-expect-zero-growth-its-problems-are-largely-homemade-62943">zero percent this year</a>. This means that the government is unlikely to provide substantial additional funding for higher education. This will exacerbate <a href="http://www.rdm.co.za/politics/2016/07/25/plan-to-tax-university-graduates-to-pay-for-higher-education">the financial distress</a> already being felt by institutions.
So what choices does the country have? I have prepared some scenarios that set out possibilities. </p>
<p>But first, some context.</p>
<h2>The challenge</h2>
<p>In South Africa the number of enrolments has nearly doubled from approximately half a million in 1994 to close to a million by 2014 – an increase in participation rate <a href="http://www.che.ac.za/sites/default/files/publications/Vital%20Stats%202013_web_0.pdf">from 12% to 20% in 2013</a>. This means that historically underrepresented groups now make up the <a href="http://www.che.ac.za/sites/default/files/publications/Vital%20Stats%202013_web_0.pdf">overall majority (83%)</a>. It’s good news: we have made progress towards equity of access. </p>
<p>But these gains have not translated into equity of outcomes in terms of students completing their qualifications. Roughly a third of those enrolled will have dropped out in their first or second year, and <a href="http://www.che.ac.za/sites/default/files/publications/Full_Report.pdf">between 40% and 50% will not graduate at all</a>. </p>
<p>The inequalities are starkly evident when we compare the drop-out rates for the 2008 bachelors’ <a href="http://www.dhet.gov.za/HEMIS/2000%20TO%202008%20FIRST%20TIME%20ENTERING%20UNDERGRADUATE%20COHORT%20STUDIES%20FOR%20PUBLIC%20HIGHER%20EDUCATION%20INSTITUTIONS.pdf">cohort by race</a> (using the apartheid classifications, which are still used to monitor redress): black African students (34%), coloured students (37%), Indian students (29%) and white students (21%).</p>
<p>In response to the crisis, the state is committing close to R1 billion (about US$71 million) per annum from 2017 to 2020 as “ear-marked” funding to support greater efficiency of teaching and learning. The purpose of these funds is to address the imperatives of equity and quality. </p>
<h2>Possible scenarios</h2>
<p>Scenarios are stories about how the <a href="http://monitorinstitute.com/downloads/what-we-think/what-if/What_If.pdf">future might unfold</a>. They are theoretical reductions of complex variables that are intended to provoke discussion and debate about strategic choices. The scenario thinking process selects some of the trade-offs or strategic choices that then constitute possible futures.</p>
<p>There are currently a number of strategic resource choices that the sector faces. The one is the extent to which the state increases financial aid to students. The other is the extent to which the state invests in improving the effectiveness of teaching and learning.</p>
<p>If we put these two into a matrix, we end up with four possible future scenarios. These are: </p>
<ul>
<li><p>an ideal future in which government increases financial aid to students and investment in teaching and learning effectiveness;</p></li>
<li><p>an elite future in which government decreases financial aid, but increases investment in teaching and learning;</p></li>
<li><p>a wasted future in which government freezes or cuts back on financial aid and invests little in teaching and learning; and </p></li>
<li><p>a high-waste future in which government increases financial aid but decreases investment in education.</p></li>
</ul>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/132373/original/image-20160728-12116-1b1076v.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/132373/original/image-20160728-12116-1b1076v.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=475&fit=crop&dpr=1 600w, https://images.theconversation.com/files/132373/original/image-20160728-12116-1b1076v.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=475&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/132373/original/image-20160728-12116-1b1076v.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=475&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/132373/original/image-20160728-12116-1b1076v.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=597&fit=crop&dpr=1 754w, https://images.theconversation.com/files/132373/original/image-20160728-12116-1b1076v.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=597&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/132373/original/image-20160728-12116-1b1076v.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=597&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Future scenarios for education in South Africa.</span>
</figcaption>
</figure>
<p>All scenarios involve assumptions. For this exercise it is assumed that:</p>
<ul>
<li><p>the students admitted are academically capable;</p></li>
<li><p>the state’s educational investment yields improvements in the effectiveness of teaching and learning, resulting in better retention and increased graduation rates; and</p></li>
<li><p>there is no substantial additional state funding to work with, so any increases require cutting some existing budget. </p></li>
</ul>
<p>These assumptions are debatable, as are the scenarios they produce. This is the point of scenario thinking. </p>
<h2>The ideal future</h2>
<p>In this scenario, given the state’s increase in financial assistance and investment in teaching and learning, students are admitted to university irrespective of their socioeconomic status and there is a good chance they will successfully complete their degrees.</p>
<p>From the point of view of the system, because the financial and academic obstacles have been removed, there is an increase in participation rates and equity of access and outcomes.</p>
<p>This future is, in fact, South Africa’s official future, enshrined in policy since the <a href="http://www.che.ac.za/media_and_publications/legislation/education-white-paper-3-programme-transformation-higher-education">1997 White Paper</a>, which promised increasing participation rates, equity of access and equity of outcomes in an efficient system.</p>
<h2>The elite future</h2>
<p>In this scenario, students gain formal access to higher education if they can afford it. Given the chance of a reasonably good schooling background and the state’s educational investment, they are likely to complete their studies. </p>
<p>From a system point of view, the reduced state funding for financial aid would result in a low participation rate with low equity of access and outcomes for socioeconomically disadvantaged groups.</p>
<p>Over time, given the demography of South Africa and the growth of the black upper-middle class, this system would be racially diverse with a black majority. The system would be reasonably efficient, resulting in a highly elite higher education system. </p>
<h2>Waste futures</h2>
<p>The remaining scenarios are both waste futures, given that no investment is made in improving the effectiveness of teaching and learning, which means completion rates are poor. The difference in the two scenarios is the state’s provision of financial aid. </p>
<p>In the waste scenario, the state freezes or reduces its current contribution to financial assistance. This means students gain formal access to higher education if they can afford it, but their chances of succeeding will largely be determined by the quality of schooling. There is limited equity of access, no equity of outcomes and poor efficiency. </p>
<p>In the high-waste scenario the state increases financial aid.
Students in this scenario will gain formal access irrespective of their socioeconomic status, increasing the participation rate and equity of access. But given the lack of investment in improving the effectiveness of teaching and learning, there is a high probability that they will not successfully complete their studies. This makes for a highly inefficient system. </p>
<h2>Where is South Africa now?</h2>
<p>I would propose that South Africa currently sits somewhere in the waste scenario. The state’s investment over the past 20 years has produced an expanded system with greater equity of access, but it is far from achieving equity of outcomes. The result is inequitable and inefficient. </p>
<p>If there is a significant increase in financial assistance to talented but underprepared poor students, but there is not a significant educational investment to improve completion rates, South Africa’s trajectory moves towards the high-waste scenario. </p>
<p>The state’s most pressing transformation priority needs to be investing in carefully targeted and monitored educational interventions that improve the effectiveness of teaching and learning, reduce drop-out and improve graduation rates. An example would include a revised undergraduate curriculum that is more fit-for-purpose by catering for a much greater diversity of educational preparedness. </p>
<p>What we must avoid is substantially increasing financial aid at the expense of greater efficiency – otherwise more students will get financial access to higher education but their chances of walking out with a degree are not good.</p><img src="https://counter.theconversation.com/content/63233/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Suellen Shay receives funding from NRF and from DHET.
</span></em></p>South African universities are under enormous financial pressure. They also face a fresh round of student protests ahead of a decision on next year’s fees. Hard choices need to be made.Suellen Shay, Dean and Associate Professor, University of Cape TownLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/625202016-07-26T20:53:28Z2016-07-26T20:53:28ZFees must fall – but not at the expense of quality higher education<figure><img src="https://images.theconversation.com/files/130854/original/image-20160718-2133-5ar39c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Students have been emboldened and won't give up their demand for free education.</span> <span class="attribution"><span class="source">Nic Bothma/EPA</span></span></figcaption></figure><p>South Africa’s university campuses are quiet – for now. There’s been sporadic unrest, but nothing like the protests that brought institutions to <a href="https://theconversation.com/after-protests-it-cant-be-business-as-usual-at-south-africas-universities-50548">a standstill</a> in late 2015 and early 2016.</p>
<p>This period of quietude isn’t surprising. Protesting students won their demand for a <a href="http://www.belfasttelegraph.co.uk/news/world-news/south-african-tuition-fees-frozen-for-2016-amid-student-protests-34134871.html">freeze on fee increases</a> easily. Their demand for <a href="http://www.bdlive.co.za/national/education/2016/01/20/wits-and-students-agree-on-way-ahead-to-free-education">free university education</a> has not yet been met.</p>
<p>The concession on fee increases for 2016 was an attempt to buy peace. There was no attempt to engage students on the implications for quality and sustainability. Instead, President Jacob Zuma established a <a href="http://www.justice.gov.za/commissions/FeesHET/docs.html">Commission of Inquiry</a> into the feasibility of free higher education in January 2016. The commission must complete its work by the end of August and submit its final report in November. </p>
<p>The commission’s timeline will make it difficult for its findings to impact on fee decisions for 2017. Universities’ budgeting processes, including fee increase negotiations with students, begin in earnest after the mid-year break and are finalised by November.</p>
<p>Worryingly, the commission seems to be operating far from the public eye. Now is the time to return the debate about free higher education and fee freezes to the public domain. </p>
<h2>Financial distress</h2>
<p>The state scrambled together most of the funds necessary to compensate universities for the shortfall in revenue from the 2016 fee freeze – R1.9 billion of the R2.2 billion needed. Universities then funded the remaining R300 million from reserves and by scaling down expenditure. The state has budgeted an equivalent amount for 2017 and 2018 but it is unlikely that universities will be able to do the same without compromising teaching and research. So what happens in the next few years?</p>
<p>The state and universities are <a href="http://www.timeslive.co.za/thetimes/2016/07/05/Fee-free-policy-will-doom-varsities">apparently</a> working on the assumption of a fee increase of between 6% and 7% in 2017, based on the <a href="http://www.global-rates.com/economic-indicators/inflation/consumer-prices/cpi/south-africa.aspx">Consumer Price Index</a> (CPI). This would not make up for the gaping hole in university finances that will result from in-sourcing non-academic services, which was also a student demand and which has been agreed to in principle. </p>
<p>It is <a href="http://www.timeslive.co.za/thetimes/2016/07/05/Fee-free-policy-will-doom-varsities">estimated</a> by the representative body, <a href="http://www.universitiessa.ac.za/">Universities South Africa</a>, that this will cost anywhere between R400 million and R2 billion. Baseline funding would have to be substantially increased to ensure the sustainability of the universities. </p>
<p>This is unlikely given the <a href="https://theconversation.com/what-south-africa-needs-to-do-to-step-away-from-the-downgrade-precipice-61335">parlous state</a> of South Africa’s economy. But even if were possible, universities would still be financially distressed: CPI is not an adequate measure of the costs of higher education. Academic books and laboratory equipment are mostly imported, which significantly increases costs as the rand keeps weakening. It is because of this and because state subsidies have been declining in real terms over the past 15 years – while student numbers have <a href="http://www.che.ac.za/sites/default/files/publications/Vital%20Stats%202013_web_0.pdf">kept increasing</a> – that fees have risen.</p>
<h2>Hobson’s choice</h2>
<p>The state subsidy as a proportion of institutional income <a href="http://www.che.ac.za/sites/default/files/publications/Vital%20Stats%202013_web_0.pdf">remained at 40%</a> between 2008 and 2013. This has had a direct impact on teaching and learning. While student enrolments grew by 34% in this period, permanent academic staff <a href="http://www.che.ac.za/sites/default/files/publications/Vital%20Stats%202013_web_0.pdf">only increased</a> by 22%. </p>
<p>Universities are left with <a href="http://www.merriam-webster.com/dictionary/Hobson's%20choice">Hobson’s choice</a>. They can either increase student fees or do nothing, which would lead to the slow but sure decline in the quality of education that’s on offer.</p>
<p>The assumption of a CPI-linked fee increase is likely to come to naught if it is imposed without any prior engagement and agreement with students. This should be an elementary lesson learnt from the attempt by the authorities to impose a unilateral fee increase in 2015 – which is what set off the protest movement.</p>
<p>The fact that a CPI-linked fee increase is being mooted suggests there is <a href="http://www.timeslive.co.za/thetimes/2016/07/05/Fee-free-policy-will-doom-varsities">recognition</a> that a further freeze on fees is unsustainable. It can’t be assumed, though, that the demand for free higher education is off the agenda or that students would be willing to countenance fee increases either in 2017 or in the future. </p>
<h2>Higher education globally is elitist</h2>
<p>It’s an incontrovertible fact that working- and lower-middle-class students can’t access higher education without financial support.</p>
<p>It doesn’t follow, however, that the solution is free higher education for all. Higher education worldwide, unlike schooling, is elitist. Access is restricted to a proportion of the eligible age cohort. This advantages middle- and upper-middle-class students because of their financial means and access to quality schooling. In effect, since fees constitute a fraction of the total cost of study, their access to higher education is subsidised by low-income families. </p>
<p>So free higher education in the current context will further exacerbate South Africa’s already high level of inequality.</p>
<p>Similarly, graduates have a greater advantage when it comes to employability and the potential of higher earnings. This suggests that a bursary and loan scheme like the existing National Student Financial Aid Scheme (NSFAS) is a fairer way to ensure affordable access to higher education. It enables recovered loans – <a href="http://bit.ly/2a0ke6X">R5.4 billion since 1998</a> – to be re-injected into the scheme. </p>
<p>The key challenge confronting the NSFAS is insufficient funding to meet rising demand, including what’s needed to cover the “<a href="https://theconversation.com/in-south-africa-university-is-open-to-rich-and-poor-but-what-about-the-missing-middle-36801">missing middle</a>” who fall outside the scheme’s current income threshold of R120,000. The scheme is developing a new funding model that would bring the “missing middle” into the net. </p>
<p>The problem is not the funding model but the quantum of funds available. Increasing the number of eligible students will – unless more funding is made available – exacerbate the current crisis. The extent of the need is indicated by estimates. These suggest that an additional R10.7 billion would be required annually to cover all the students (just more than 250,000) who qualify for NSFAS support.</p>
<p>This may well be affordable if national priorities are shifted, including addressing the huge wastage in resources because of corruption and a bloated public service. It’s easier said than done. Even if resources were freed up, there are other competing social priorities.</p>
<h2>Wastage in higher education</h2>
<p>Student numbers <a href="http://www.sanews.gov.za/south-africa/more-south-africans-higher-education">have doubled</a> since 1994. The problem is that this hasn’t been matched by a concomitant increase in student throughput rates. About 45% of an entering undergraduate cohort <a href="http://www.che.ac.za/media_and_publications/research/proposal-undergraduate-curriculum-reform-south-africa-case-flexible">drops out</a> without obtaining a qualification. </p>
<p>Of those who do graduate, just under half take <a href="http://www.che.ac.za/media_and_publications/research/proposal-undergraduate-curriculum-reform-south-africa-case-flexible">five or more years</a> to do so. That’s an enormous waste of scarce financial resources and is higher education’s real crisis.</p>
<p>Lack of money is one of the reasons for these high dropout rates. Another factor is school leavers’ <a href="https://theconversation.com/what-final-exam-results-reveal-about-south-africas-school-system-52780">under-preparedness</a> for higher education. This is not taken into account by the curriculum and qualification structure, which is not suited to the socioeconomic, cultural and educational background of students entering higher education.</p>
<p>So a key first step and priority in relieving funding pressures must be to improve the internal effectiveness and efficiency of the higher education system. This requires systemic intervention to address the knowledge and skills gap between school and university through restructuring the curriculum and qualification structure in higher education. This could be done, as <a href="http://www.che.ac.za/media_and_publications/research/proposal-undergraduate-curriculum-reform-south-africa-case-flexible">a report</a> commissioned by the country’s Council on Higher Education indicated, by adding an extra year to the traditional three- and four-year qualifications. </p>
<p>The council advised the minister of higher education and training in December 2014 to consider piloting a new curriculum and qualification structure along these lines. There was widespread, if qualified, support from universities. But to date there’s been no indication of a public response from the minister to the council’s advice.</p>
<h2>Avoiding more stand-offs</h2>
<p>Free higher education may not be desirable or feasible in the short or medium term. To achieve it in the long term, a road map must be developed. This must include finding solutions to universities’ funding challenges through an open, honest and transparent national engagement process and dialogue. </p>
<p>This is imperative to avoid a repeat of the stand-off between students and universities, and to secure the future of a quality public higher education system.</p><img src="https://counter.theconversation.com/content/62520/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ahmed Essop does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>South African students’ demands for free university education are not going away. Nor are the country’s economic realities.Ahmed Essop, Research Associate in Higher Education Policy and Planning, Ali Mazrui Centre for Higher Education Studies, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/330772014-10-22T00:38:45Z2014-10-22T00:38:45ZWhy our university funding debate wouldn’t make sense to Germans<p>Recent times have seen heated debates in Australia about whether higher education tuition fees should be deregulated, and about <a href="https://theconversation.com/education-is-a-public-good-not-a-private-commodity-31408">the private/public benefits of higher education</a>. A question that goes to the heart of these debates is whether higher education is primarily considered as a social institution, as an industry like any other, or as infrastructure. </p>
<p>The <a href="https://theconversation.com/how-germany-managed-to-abolish-university-tuition-fees-32529">recent decision to eradicate all tertiary fees</a> in Germany provides interesting points of comparison between how Australia and Germany view education. </p>
<h2>Higher education as industry</h2>
<p>In Australia, recent decades have seen a considerable shift toward conceiving of higher education primarily in terms of an “industry”. As part of this change, universities have become increasingly regarded as corporate organisations competing in the local and international service economy. </p>
<p>At the same time, the perception of universities as social institutions providing orientation to society has waned. In line with this shift in perceptions, the relative public funding provided to universities has suffered a continuing reduction. In 2012, less than 50% on average of the revenue of “public” higher education providers <a href="http://docs.education.gov.au/system/files/doc/other/finance2012.pdf">came from Australian government sources</a>.</p>
<h2>Higher education as infrastructure</h2>
<p>In Germany, the purpose of higher education has likewise become in recent times increasingly framed in terms of more practical economic goals and concerns. </p>
<p>But in Germany, in contrast with Australia, the political push for a more practical, economically oriented view of higher education is not so much centred on the notion of universities becoming corporate organisations competing in a marketplace. Rather, in current German politics and policies, universities tend to be primarily regarded as vital infrastructure for the economy at large. </p>
<p>This difference in how the economic role of universities is framed in each country translates into different approaches to core policy issues such as funding, tuition fees and internationalisation.</p>
<p>In Germany, as has been recently noted in <a href="https://theconversation.com/should-we-follow-the-german-way-of-free-higher-education-23970">The Conversation</a>, even low-level tuition fees have proven to be rather unpopular. As a result, all German states have eventually scrapped all fees. Moreover, there still is a relative consensus in the political arena that it is the government’s responsibility to provide the bulk of funding to universities. German universities receive around<a href="http://www.hrk.de/themen/hochschulsystem/arbeitsfelder/hochschulfinanzierung/"> 90% of their funds from the public purse. </a></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/62041/original/rwqd69wh-1413508083.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/62041/original/rwqd69wh-1413508083.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/62041/original/rwqd69wh-1413508083.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=365&fit=crop&dpr=1 600w, https://images.theconversation.com/files/62041/original/rwqd69wh-1413508083.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=365&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/62041/original/rwqd69wh-1413508083.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=365&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/62041/original/rwqd69wh-1413508083.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=458&fit=crop&dpr=1 754w, https://images.theconversation.com/files/62041/original/rwqd69wh-1413508083.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=458&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/62041/original/rwqd69wh-1413508083.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=458&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">(Free) University in Hannover.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/sprengben/4958460498">Flickr/Spreng Ben</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Attracting international students</h2>
<p>Over recent years, Germany has become increasingly proactive in attracting international students to its higher education institutions. A particular focus has been on attracting students from China and India. According to the <a href="http://www.topuniversities.com/student-info/qs-guides/trends-International-Student-Mobility-2014">2014 Trends in International Student Mobility survey</a>, Germany’s popularity as a destination for international students has been growing very rapidly, and has recently overtaken that of Australia. </p>
<p>The primary motive for this push toward internationalisation in German higher education has been the need to tackle shortages of skilled labour. A related concern has been addressing long-term demographic developments. There are no tuition fees for international students in Germany. This is not likely to change in the near future, partially due to legal constraints imposed by the German constitution. </p>
<p>By contrast, Australian universities have been attracting international students, very successfully to date, mainly in order to compensate for the reduction of public funding from the Australian government.</p>
<h2>Different funding models</h2>
<p>Overall, the framing of higher education in terms of infrastructure may be one of the reasons for there being less reluctance in Germany to provide substantial public funding to universities than there has been in Australia. It also may partially explain why, in Germany, the debate concerning the public and/or private benefits of higher education, which we have become accustomed to in Australia, has had hardly any traction whatsoever. </p>
<p>The framing of higher education as industry in Australia has led to universities successfully diversifying their funding sources. As a result, universities have become less reliant on the public purse. However, it has also come at the cost of major higher education policies and institutional strategies in Australia often lacking a long-term vision. Moreover, it has led to the creation of a higher education sector in Australia that is heavily exposed to risks associated with the international student market.</p><img src="https://counter.theconversation.com/content/33077/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Woelert does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Recent times have seen heated debates in Australia about whether higher education tuition fees should be deregulated, and about the private/public benefits of higher education. A question that goes to…Peter Woelert, Research Fellow, Education Policy and Leadership, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.