Re-evaluate higher education spending

ONGOING student protests in South Africa have again highlighted various problems with higher education funding. They boil down to challenges of affordability and sustainability.

State funding of universities is inadequate – it hasn’t kept pace with enrolment pressures and the increasing costs of providing higher education.

Many students cannot afford to pay fees either. Yet the student financial aid system isn’t a reliable source of support.

Fee-free higher education

In 2016, there was a presidential commission of inquiry into the feasibility of making higher education and training fee-free. It found that the state couldn’t afford to provide free higher education to all who were unable to finance their own education.

But the government then decided anyway to provide free university education for poor and working-class students beginning in 2018. The National Student Financial Aid Scheme (NSFAS), which had provided bursaries and mortgage-type loans, became a bursary scheme for students from families with an annual income under R350 000.

Even before the Covid-19 pandemic, which has increased financial hardship for families, several analyses showed that fee-free higher education would put unsustainable pressure on the country’s public finances, especially as enrolments grew.

Countries such as Denmark, France, Taiwan, Colombia and Indonesia have approved funding support for universities or students in response to Covid-19’s economic challenges.

Unlike them, South Africa’s reprioritisation budget reduced planned expenditure for higher education, including the NSFAS. This decision is difficult to comprehend given the government’s own projections of significant job losses, meaning more students would need support.

Unsurprisingly, for this year NSFAS applications exceeded 750 000, surpassing 2020’s by more than 185 000 applications.

The economic challenges facing the country, the high levels of inequality and the high number of students from poor and working-class families call for a funding model that doesn’t create an affordability crisis, both for students and the state.

It is possible to intervene in a way that acknowledges the policy goals of expanded access and equity, the country’s perilous economic circumstances and the diverse economic situations of students.

The country needs a funding system that guarantees access, affordability and sustainability.

It must protect the poor through bursaries to foster inclusion and limit personal debt.

It’s a good time to revisit the recommendations of the presidential commission of inquiry on fee-free higher education and training.

One recommendation was to introduce an income-contingent loan system. This system aligns repayments with student earnings.

Student debtors start paying only when they start earning a certain income. This protects graduates during financial difficulties.

The student protests have highlighted, again, the structural weaknesses of the student funding model and the multiple funding-related crises confronting South Africa’s higher education.

The immediate challenges need to be addressed to ensure students continue to learn and universities remain stable.

But, ultimately, South Africa needs to reshape the funding model for resilience and sustainability.