Task teams, ministerial committees, judicial commissions: these are just some of the bodies that have been set up to tackle South Africa’s higher education funding crisis since 2011. They’re headed by vice chancellors, retired judges, leading business people and in one instance, South Africa’s deputy president, Cyril Ramaphosa.
Independent researchers, civil society groups, the country’s National Student Financial Aid Scheme (NSFAS) and individual universities have contributed to a significant body of knowledge through economic models and scenarios designed to fix higher education funding.
But the crisis is deepening. All of the talking and planning has not led to any firm resolutions and universities are on the verge of paralysis. Students are protesting. Classes have been suspended at some institutions and there are fears that the 2016 academic year may not be completed. Students have put into sharp focus the deepening inequalities in South African society, their dissatisfaction with inconclusive review processes, and governance, corruption and wastage.
Action is needed. Proposals must be translated into firm commitments, in a scenario which maps out what will be available in the short, medium and long term. The time frames have to be clarified.
Ahead of the Medium Term Budget Policy Statement on October 26 2016, Finance Minister Pravin Gordhan has invited “tips” from the public. In response, here is a compilation of some of the substantive proposals that have emerged from research and committees over the past five years. There’s also an outline of which of these can be put quickly into practice to end the impasse.
Consensus on key proposals
Several proposals have been made to address two issues: chronic underfunding of higher education, and calls for fee-free higher education. These include:
- an overhaul of the NSFAS funding model;
- an increase in the tax base to include a graduate tax or a notional loan scheme payable on employment;
- a corporate tax;
- a wealth tax; and
- an increase in the skills development levy. This is a contribution made by the business sector to education and training for the post schooling sector.
The detail of these proposals may differ, but there are important common points of agreement.
There’s been nearly unequivocal consensus that any 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 South Africa, who meet the criteria for academic merit, must be available as soon as possible.
There is also broad agreement that the neediest students require a full cost provision. This would include accommodation, food and books. There is agreement, too, that “missing middle” students – who fall outside the existing NSFAS criteria but whose families simply can’t afford university tuition – must be supported through a combination of grant and loans to guarantee their access.
There is agreement that funding for higher education must increase, with a possible revision of the GDP contribution from 0.7 % to at least 1% in line with the global norm. Research has shown this would immediately release a further R11 billion for the university sector.
This is crucial. Research evidence points to a higher education system under severe strain: rising enrolments, low degree completion rates, high staff to student ratios, an unsustainable funding base and poor NSFAS loan recovery.
Student enrolments grew by 67% between 2002 and 2014. In the same period, the growth of permanent academic staff was 20%. Fewer than half of the students who enter a three year degree complete their studies.
And government funding to universities declined from 49% to 40% in the same period. The shortfall was made up by student fees. These increased by 9% per annum, in contrast to the country’s 5% to 6% inflation rate.
Moving forward urgently
Here, then, are a few steps that can be taken quickly to ease the crisis.
For 2017, the current NSFAS loan scheme should be converted to a grant scheme for students whose parents are in the income bracket of R120 000 (around US $8,600) per annum. This must be available to all students who are eligible in terms of academic merit.
Between 2017 and 2018, the grant and loan scheme for the “missing middle” (whose parents earn between R120 000 and R600 000 a year) should be implemented progressively, based on parental income.
The Ikusasa Student Financial Aid Scheme, championed by the NSFAS board chairperson, is an interesting approach to this particular issue. It’s a public-private partnership model and seeks to raise funding from the public, private and business sectors for such students.
Those who earn above this threshold of R600 000 should continue to pay fees and increases. This would release more resources for poor and less affluent students.
It’s crucial to ensure that their historic debt does not financially exclude students from entering the academic studies in 2017, as long as they have succeeded academically in 2016.
By June 2017, conclude the medium to long term plan for the equitable funding of quality higher education through identifying additional revenue streams. This includes reviewing the tax regime, skills levy, GDP allocation and improvement of NSFAS loan recovery, against the backdrop of these reforms’ potential economic impact.
Improve efficiency and quality enhancement in universities so that the increased inputs result in the desired outputs and outcomes.
For the good of all
There are a few macro funding principles embedded in these commitments: cost sharing, efficiency and quality, and education as a public good.
Given the degree of consensus on the above, there’s a mandate for Treasury, the Department of Higher Education and Training and all key stakeholders to apply innovative and new thinking to the funding of higher education. And all can claim the victory for the provision of publicly funded higher education for the most needy in South Africa’s society.
This will go a long way to contributing to the much needed stability required in the increasingly fragile higher education sector – and to restoring hope for future generations of young people.