The beginning of the academic year in South Africa is the most stressful time for parents of children who come from poor, rural and working class backgrounds. This when they have to confront the difficult question of where the money will come from to fund their children’s higher education. University administrators are also grappling with tough decisions on how to fund the education of brilliant students who need financial help.
At my institution, we have had to inform 130 academically talented but financially needy students that they cannot come to Rhodes University in 2015 because our allocation of financial aid has been used up. The pain of communicating this message to a student is unbearable. It is devastating for a young and ambitious person who, by sheer accident of nature, happened to be born into a family of little means. And it can spill over into anger, demonstrated by a recent protests at Wits University.
The dawn of democracy in 1994 gave hope to many who had been deprived of opportunities to go to university during the apartheid era. Now, 20 years later, the doors are open, but only if you have the financial means to enter them. And this means the middle classes are being squeezed out – making universities only available to the very poor and the very rich.
Right to education
The Freedom Charter adopted by South Africa’s African National Congress in 1955, promises that:
… education shall be free, compulsory, universal and equal for all children; higher education and technical training shall be opened to all by means of state allowances and scholarships awarded on the basis of merit.
In line with this promise, Section 29 of South Africa’s 1996 constitution guaranteed every citizen “the right to basic education, including adult basic education”. This came into law immediately.
The same section of the constitution guarantees every citizen the right to “further education which the state, through reasonable measures, must make progressively available and accessible.” Unlike the right to basic education, the right to further education was not made “immediately realisable” in the 1996 Constitution. Instead, the state must demonstrate its effort to make further education “progressively available and accessible”.
Big funding gaps
State funding of higher education has declined in both real and per capita terms in recent years, a point highlighted in 2013 by a ministerial committee chaired by deputy president Cyril Ramaphosa. State funding per full-time equivalent student declined, in real terms, by 1.1% a year between 2000 and 2010. Although the state budget as a percentage of GDP has gradually increased, it has dropped as a percentage of the state’s total finance, as the graph below shows.
In order to mitigate the negative impact of the decline in state funding, higher education institutions have had to raise their tuition fees. Between 2000 and 2010, tuition fees per full-time student increased on average by 2.5% per year in real terms. This has shifted the financial burden onto students.
Increases in tuition fees create a significant barrier for the poor and working class communities to access higher education. They also lead to “privatisation” and “commercialisation” of public higher education, shifting the burden of funding higher education from the state to individuals, the “customers” who are essentially buying the public good: education. If you have financial means, you can afford higher education and if you don’t, it’s just too bad. Higher education, by this point of access, becomes the preserve of the rich.
This severely undermines the pressing national imperatives of advancing social equity and social justice. It undermines the creation of the kind of a society envisioned in our constitution and the need to redress the inequities bequeathed by the apartheid system.
Middle class misses out
In order to help pay for further education at undergraduate or postgraduate level for all South Africans, a 1997 White Paper created a policy framework for the establishment of the National Student Financial Aid Scheme in order to “provide access to higher education, particularly by individuals from historically disadvantaged and poor communities”.
Over the past three years, funding for the scheme has increased three-fold: from about R3 billion (US$260m) to R9.5 billion in 2015. But the demand for financial aid far outstrips the available resources. There are far more academically talented and financially needy students than there is money set aside.
The family income threshold for a student to qualify for financial support is so low – at R180,000 per year, around $16,000 – that they have to be desperately poor to receive it. This leaves out many academically talented children of teachers, nurses, police and other civil servants whose income is above the threshold but not high enough to afford paying university fees.
This means you have to be desperately poor or wealthy to afford higher education in South Africa. The “missing middle” – children from middle-income families – are not catered for in our financial aid scheme. The expectation is that these middle-income families can secure bank loans to finance the education of their children. Unfortunately, many of these parents are so debt-ridden that our highly risk-averse financial institutions would not even look at their application for financial assistance.
To combat this, universities invest significant financial resources of their own to assist financially needy students. Some universities, such as Rhodes University, use a “Robin Hood” approach: charging higher tuition fees and then using the money paid by those students who can afford to pay to subsidise those who can’t. This is, of course, not sustainable in the long run.
What to do
There are at least four things that need to be done to address the challenge of supporting financially needy students in South Africa.
First, the National Student Financial Aid Scheme must get its house in order. It must improve loan collections and replenish the funding scheme.
Second, the business community and private sector must make significant contributions to bolster the scheme’s coffers in order to develop a sustainable student financial aid programme.
Third, a graduate tax must be imposed on those who have acquired higher education in order to generate much needed financial resources to support financially needy students.
Fourth, financial institutions should find creative mechanisms of providing affordable student loans to children from middle-income families. They should not “punish the children for the sins of their parents” by refusing them loans on the basis of the fact that their parents are debt-ridden.
Until such time that there is a sustainable mechanism of funding all academically talented but financially needy students at an appropriate level, we must brace ourselves for student protests at this time of the year. For many deserving students, while the doors of higher education are “open” in theory, they remain closed in practice.