FREE VAR­SITY WON’T FLY — BUT THIS CAN

Financial Mail - - EDITORIALS -

t should come as no sur­prise that the He­her Com­mis­sion has fi­nally con­cluded that free higher ed­u­ca­tion for all South Africans is “un­af­ford­able”. Two years ago, Pres­i­dent Ja­cob Zuma es­tab­lished the com­mis­sion to an­swer the ques­tion: is free higher ed­u­ca­tion fea­si­ble?

Ac­tu­ally, it was the wrong ques­tion, be­cause the an­swer was al­ways go­ing to be “no”. It doesn’t take more than a cur­sory glance at SA’S pub­lic fi­nances to see that.

Any­way, with only 5% of poor chil­dren qual­i­fy­ing for univer­sity, com­pared with 40%-50% from the af­flu­ent mid­dle-classes, free ed­u­ca­tion would al­ways be a re­gres­sive pol­icy, giv­ing a free ride to those who could ac­tu­ally af­ford to pay some­thing to­wards ed­u­ca­tion.

Rather, what He­her’s com­mis­sion should have been asked to es­tab­lish was whether ter­tiary ed­u­ca­tion could be made more ac­ces­si­ble through in­no­va­tive fi­nanc­ing mech­a­nisms, be­cause then the an­swer would have been a re­sound­ing “yes”.

So, hav­ing sat on He­her’s re­port for months — thereby plung­ing the state into yet another pub­lic re­la­tions night­mare that threat­ens to bub­ble over into fur­ther vi­o­lent protests — Zuma still can’t sat­isfy stu­dents’ de­mands.

It is vi­tal that the state gets ahead of the sit­u­a­tion by ex­plain­ing that He­her has pro­posed a more sus­tain­able so­lu­tion than free univer­sity ed­u­ca­tion, but which will re­quire a greater con­tri­bu­tion from ev­ery­one ex­cept the poor.

In this model, univer­sity stu­dents con­trib­ute to their fees on a slid­ing scale de­pend­ing on house­hold in­come, but tech­ni­cal and vo­ca­tional ed­u­ca­tion and train­ing (TVET) is free, as most col­lege stu­dents come from poorer back­grounds.

The com­mis­sion also rec­om­mends that TVET stu­dents get a stipend and R50bn be di­verted from the sur­plus in the Un­em­ploy­ment In­sur­ance Fund to re­ha­bil­i­tate col­lege in­fra­struc­ture.

The clear at­tempt by the com­mis­sion to chan­nel stu­dents to­wards tech­ni­cal and vo­ca­tional

Ica­reers makes sense, given the needs of the econ­omy and SA’S sky-high un­em­ploy­ment. But find­ing the money, even for this, will be tricky.

Re­port­edly, one of He­her’s rec­om­men­da­tions is that gov­ern­ment sub­si­dies to uni­ver­si­ties should be raised to 1% of GDP. That would push up the sec­tor’s 2018/2019 al­lo­ca­tion from R39bn (0.8% of GDP) to about R49bn.

In ad­di­tion, the state cur­rently spends R10bn/year fund­ing 70% of TVET stu­dents. Cover­ing the full cost of study for all of them would cost a fur­ther R23.5bn over the next three years.

To en­sure the state’s stu­dent fi­nan­cial aid scheme re­mains sus­tain­able, He­her re­port­edly rec­om­mends that loan ben­e­fi­cia­ries who grad­u­ate and find jobs be sub­ject to au­to­matic salary de­duc­tions by the SA Rev­enue Ser­vice once they earn more than a cer­tain amount.

This was the sen­si­ble rec­om­men­da­tion made by a task team set up un­der for­mer Firstrand CEO Sizwe Nx­as­ana at the height of the fees protests.

It also pro­posed ways to tap into pri­vate in­sti­tu­tions to fund the R25bn gap be­tween what gov­ern­ment can af­ford and what is needed to cover the full cost of ter­tiary study for poor and “miss­ing-mid­dle” stu­dents.

The so­lu­tion, it said, was to over­haul the dys­func­tional Na­tional Stu­dent Fi­nan­cial Aid Scheme and re­place it with a pri­vate-pub­lic part­ner­ship scheme to win the trust of fun­ders. A pilot project, Ikusasa, has been op­er­at­ing at seven uni­ver­si­ties over the past year, and feed­back has been “very pos­i­tive”, says Nx­as­ana.

There are enough sim­i­lar­i­ties in the fund­ing ap­proach from the He­her re­port to sug­gest this new model is be­ing em­braced. It’s a bet­ter model for SA than free ed­u­ca­tion, af­ter all.

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