Towards a sustainable solution to the higher education fees challenge

The private sector and government have partnered to address the crisis in higher education

The new public Ikusasa Student Financial Aid Programme is a public-private partnership initiative designed to help students from poor and middle-income families gain access to universities and Technical Vocational Education and Training colleges, and to succeed through the provision of full financial and non-financial support.

Government has largely succeeded in opening up access to university education and TVET colleges for an increasing number of students. However, it remains an unfortunate reality that our country’s higher education and training institutions, especially universities, are unaffordable for many students from disadvantaged backgrounds and middleincome families.

The high levels of competition for bursaries and scholarships also mean that not all students, no matter how academically deserving, can be fully supported using this funding method. Student loans from financial institutions, while an option for some, are also inaccessible to many as their family incomes do not meet the affordability criteria of lenders, and where they do, students and their families are saddled with huge debt burdens before they even enter the job market.

The National Student Financial Aid Scheme (Nsfas) has done much to deal with the problem for poor students, but the main challenge is that students at the more expensive institutions and in many professional programmes cannot be funded fully. Middle income families have so far been left out of this scheme.

The result of all this is that too many young South Africans remain unable to access the opportunity to obtain a tertiary education and professional qualification. This is recognised as a national challenge that culminated in the #FeesMustFall protests that began in October 2015 and debates about the cost and funding of higher education.

Substantial work has been done by the department of higher education and training since the review of Nsfas in 2010, and the release of the working group report on free university education for the poor in 2013. To further develop this work, a Ministerial Task Team was set up in 2016 to fasttrack the development of an efficient and sustainable model to address the funding challenge of South Africa’s students in universities and TVET colleges. It is this work that has culminated in the proposal for the Ikusasa Student Financial Aid Programme (Isfap).

The programme is designed to help students from poor and middle income families — commonly referred to as the “missing middle” — to gain access to universities and TVET colleges, and to succeed in their studies through providing full financial and non-financial forms of support. The programme will provide upfront financial support for a greater number of students than is currently the case, and will do this through a combination of government and private sector funding. It is intended as a long-term initiative that can address the need for accessible and affordable student funding in a sustainable way.

While Isfap is currently focusing mainly on the scarce skills professions that South Africa lacks and needs, the programme will ultimately support students in any qualification, including general formative qualifications and those qualifications designed to produce professionals, technicians and other skill sets for the labour market.

Through Isfap, government and the private sector are also investing in helping universities to develop their technological systems. The programme is utilising a tool known as Isfap Connect to track students through data analytics and provide advisory and other support services to increase students’ chances of success. This tool allows for Isfap programme managers to track the academic progress of students, so as to pick up any possible challenges to their academic progress and take remedial steps to address these. Funders usually wait for academic results to gauge student progress, by which time it is often too late to intervene if a student is doing poorly.

Isfap will, through providing full funding for students, also contribute to improving the employment prospects of graduates, while simultaneously creating a highly qualified and sustainable pipeline for professions that our country so desperately needs, such as chartered accountancy, actuarial science, engineering, medicine and social workers.

Throughout the Ministerial Task Team process, one question came up consistently: what model is Isfap based on, and what makes it so different?

Isfap is a hybrid-funding model structured in the form of a mix of grants, income-contingent deferred payments and effective family contributions. Based on a means-test matrix, students who come from very poor backgrounds and are supported by the programme will receive fullysubsidised funding, while students from middle-income families will receive funding that is split between grant, income-contingent deferred payment and family contribution, with a greater part of their studies falling in the grant portion during their first and second years of study.

The programme is also underpinned by the provision of nonfinancial support to funded students in order to ensure their success. This includes tutorial support, life skills training, mentoring and psychosocial support on campus. This use of both financial and non-financial support to funded students is based on the Thuthuka Bursary Fund (TBF) model of the South African Institute of Chartered Accountants (Saica), known as full wrap-around support.

Through TBF (which funds black and coloured students looking to study towards becoming chartered accountants, in an effort to transform the chartered accountancy profession to be more reflective of the country’s demographics), Saica recognised that it takes more than just financial support to ensure that students are successful in their studies. There is also a need to ensure that students are given as much academic, social and psychological support as possible, in order for them to better assimilate and keep up with the fast pace of the universities in which they find themselves.

Factors such as poor school quality, especially in poor and rural communities; high student-to-staff ratios at undergraduate level, especially in first-year; insufficient student support for academic and social adjustment to university life; and inadequate systems for identifying those who need such support can all hamper a student’s ability to succeed at tertiary level. The TBF wrap-around support model thus inspired the way in which holistic student support can be integrated into the Isfap funding model.

In 2017, the Isfap model is being piloted at seven universities and one TVET college. The pilot is funding the studies of about 1 500 students studying in a number of general formative degrees, seven professional qualifications and two artisan qualifications for the duration of their studies. The goal of the pilot is to test aspects of the model and refine it.

At the same time, a full feasibility study on the model is underway, with the aim being to implement and roll out the full programme as soon as the full model is developed and approved, and the various legal and administrative issues are in place.

The lessons learnt during the 2017 pilot, the comments received from the public consultation process, the results of a feasibility study that will be conducted by National Treasury running parallel to the pilot, and the recommendations of the Presidential Commission of Inquiry into Higher Education and Training, will all feed into the development of the final model. The duration of the pilot will depend on these processes, but whatever the outcome of these processes, all students supported in the pilot will be assisted for the duration of their studies.

Can the public-private partnership (PPP) guarantee the success of Isfap, particularly with regards to the current fees challenge? This remains to be seen, but the Isfap task team believes South Africans need to give the programme a real chance if the country is to provide the majority of our university and TVET students an opportunity to truly succeed.

Besides currently being the best opportunity missing middle students have for sustainable funding, Isfap is also an example of what happens when the public and private sectors come together to craft and implement constructive national solutions. While we often speak of PPPs, very rarely do the public get to experience and benefit from these in the way that they will with Isfap.

However, it is critical to the success of the programme that all stakeholders in this key national effort pull together. While government and its private sector partners can lead the charge, there is a need for all South Africans to support this innovative approach to sustainable solutions regarding the fees challenge. It is the only way we can begin to effect the constitutional promise of higher education and TVET that is available and accessible for all those who merit it, especially those from disadvantaged backgrounds.

No student who is academically deserving should be denied access to tertiary education and training based on financial need. In Isfap, we may finally have a sustainable solution to providing an affordable funding solution for university and TVET education.