Fees must fall – but not at the expense of quality higher education

Students have been emboldened and won’t give up their demand for free education. Nic Bothma/EPA

South Africa’s university campuses are quiet – for now. There’s been sporadic unrest, but nothing like the protests that brought institutions to a standstill in late 2015 and early 2016.

This period of quietude isn’t surprising. Protesting students won their demand for a freeze on fee increases easily. Their demand for free university education has not yet been met.

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 Commission of Inquiry 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.

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.

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.

Financial distress

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?

The state and universities are apparently working on the assumption of a fee increase of between 6% and 7% in 2017, based on the Consumer Price Index (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.

It is estimated by the representative body, Universities South Africa, 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.

This is unlikely given the parlous state 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 kept increasing – that fees have risen.

Hobson’s choice

The state subsidy as a proportion of institutional income remained at 40% 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 only increased by 22%.

Universities are left with Hobson’s choice. 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.

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.

The fact that a CPI-linked fee increase is being mooted suggests there is recognition 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.

Higher education globally is elitist

It’s an incontrovertible fact that working- and lower-middle-class students can’t access higher education without financial support.

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.

So free higher education in the current context will further exacerbate South Africa’s already high level of inequality.

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 – R5.4 billion since 1998 – to be re-injected into the scheme.

The key challenge confronting the NSFAS is insufficient funding to meet rising demand, including what’s needed to cover the “missing middle” 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.

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.

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.

Wastage in higher education

Student numbers have doubled 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 drops out without obtaining a qualification.

Of those who do graduate, just under half take five or more years to do so. That’s an enormous waste of scarce financial resources and is higher education’s real crisis.

Lack of money is one of the reasons for these high dropout rates. Another factor is school leavers’ under-preparedness 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.

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 report commissioned by the country’s Council on Higher Education indicated, by adding an extra year to the traditional three- and four-year qualifications.

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.

Avoiding more stand-offs

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.

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.