Fee-free uni for poor stu­dents vi­able

The min­is­ter of higher ed­u­ca­tion’s task team be­lieve it has fi­nally solved the univer­sity fee cri­sis, but the Ikusasa Stu­dent Fi­nan­cial Aid Pro­gramme is just an­other way for the private sec­tor to ben­e­fit from the poor, and write

The Star Early Edition - - INSIDE -

THE Ikusasa Stu­dent Fi­nan­cial Aid Pro­gramme (Is­fap), which is be­ing pi­loted in seven uni­ver­si­ties across South Africa, is yet an­other ex­am­ple of private ac­tors tak­ing over what ought to be the com­pe­tency of the state.

The pro­gramme’s private-public part­ner­ship (PPP) model em­bod­ies the re­cent trend of pri­vatis­ing so­cial ser­vices. For many, the private sec­tor is seen to pos­sess the high lev­els of ef­fi­ciency re­quired to drive so­cial change and bridge in­equal­i­ties. A fal­lacy that was ex­posed when the so­cial grant cri­sis came to light.

In April 2016, a min­is­te­rial task team was es­tab­lished by the min­is­ter of higher ed­u­ca­tion and train­ing, and placed un­der the lead­er­ship of for­mer chief ex­ec­u­tive of First Rand Lim­ited and cur­rent Na­tional Stu­dent Fi­nan­cial Aid Scheme (NSFAS) chair­per­son Sizwe Nx­as­ana.

The team was man­dated to de­velop a sup­port and fund­ing model for poor and “miss­ing mid­dle” stu­dents. Its find­ings were re­leased in a re­port that in­cludes the dec­la­ra­tion that fee-free univer­sity is pos­si­ble and fi­nan­cially vi­able in the short­term for very poor stu­dents, and will be funded by com­bined sub­si­dies and loans.

The re­port rec­om­mended the es­tab­lish­ment of the pro­gramme as a PPP, and its pre­sid­ing body would be a donor steer­ing com­mit­tee.

The private com­po­nent will con­sti­tute a man­ag­ing com­pany called “ManCo” that will be funded through its par­ent com­pany, “FundCo”. The scheme willl act as a con­duit for public sec­tor fund­ing.

The Ikusasa aid pro­gramme pi­lot was launched in 2017 ahead of its pro­posed im­ple­men­ta­tion in 2018. All the while, NSFAS launched its “stu­dent-cen­tric” model de­vel­oped to deal with the is­sues that have been plagu­ing the fi­nan­cial scheme for years, with the very same time­lines.

The cur­rent pi­lot funds 1 000 stu­dents. Some­thing worth not­ing is that the loan com­po­nent of this pro­gramme is tiered by both the stu­dent’s per­sonal fi­nan­cial cir­cum­stances, and by the year of study.

Should a stu­dent qual­ify for a com­bined grant and loan due to their means, it is likely that the grant com­po­nent will have evolved into a loan that in­cludes an ex­pected fam­ily con­tri­bu­tion by their fi­nal year of study – but a fam­ily’s fi­nan­cial means does not sud­denly change while a stu­dent is still study­ing.

This raises con­cerns that th­ese stu­dents and their of­ten poor par­ents may in­evitably end up locked in deeper debt.

A closer look re­veals that much of the funds have been al­lo­cated in a way that safe­guards the investments of the 25 private sec­tor com­pa­nies that are fund­ing the pi­lot, as op­posed to al­lo­cat­ing them ac­cord­ing to need.

Stu­dents who pre­vi­ously at­tended quin­tile 1 to 3 schools (no fee schools) of­ten come from house­holds that have no ca­pac­ity to gen­er­ate and ac­quire the funds needed for fur­ther ed­u­ca­tion.

Given this, stu­dents from no fee-pay­ing schools will al­most al­ways end up at­tend­ing his­tor­i­cally black in­sti­tu­tions of higher learn­ing.

There is no doubt about whether poor stu­dents should be pri­ori­tised in the re­al­i­sa­tion of free higher ed­u­ca­tion; how­ever this is not what has been ob­served.

The Ikusasa pi­lot has pri­ori­tised his­tor­i­cally white in­sti­tu­tions by fund­ing 770 stu­dents at th­ese in­sti­tu­tions. The re­main­ing 230 stu­dents funded at­tend his­tor­i­cally black in­sti­tu­tions.

This is an in­di­ca­tion of the need for private investments to be safe­guarded in in­sti­tu­tions whose ca­pac­ity to pro­vide ed­u­ca­tion has long been en­trenched as op­posed to fund­ing stu­dents at­tend­ing in­sti­tu­tions which need the funds to im­prove their ca­pac­ity to pro­vide a bet­ter and well-re­sourced higher ed­u­ca­tion.

When stu­dents marched for free ed­u­ca­tion in 2015, cor­po­rate South Africa re­mained mostly silent, with many stu­dents crit­i­cis­ing their lack of sup­port for the move­ment.

Yet, in light of this PPP’s es­tab­lish­ment, cor­po­rate South Africa has sud­denly man­aged to raise more than R138 mil­lion in four months for the pi­lot.

This is in­trigu­ing at first glance, be­cause it can be un­der­stood as pos­si­bly the first time that the private sec­tor is fi­nally con­tribut­ing to sup­port higher ed­u­ca­tion in a meaningful way.

How­ever, upon deeper in­ter­ro­ga­tion, this long-over­due par­tic­i­pa­tion ap­pears to be in no way al­tru­is­tic.

The private sec­tor has al­ways pos­sessed the means to fi­nance the ed­u­ca­tion of many poor young South Africans, but has for years opted not to do so. One has to won­der what has mo­ti­vated such a mas­sive con­tri­bu­tion in such a short amount of time?

The an­swer to this may lie in the amend­ments to the NSFAS Act, the SA Rev­enue Ser­vice Act, and the In­come Tax Act, as rec­om­mended by the min­is­te­rial task team. Th­ese amend­ments would al­ter the func­tion­al­ity, reach and con­di­tions un­der which grants and loans are determined.

Ad­di­tion­ally, th­ese amend­ments would ren­der Sars the of­fi­cial col­lect­ing agent for Is­fap, and al­low it to be ex­empt from in­come tax. All the while em­pow­er­ing the fi­nan­cial aid pro­gramme to is­sue sec­tion 18(a) tax cer­tifi­cates to donors that would see the donors ben­e­fit­ing from the same tax ex­emp­tions they would re­ceive if they were do­nat­ing to public ben­e­fit or­gan­i­sa­tions. As the vice chair­per­son of the SARS board, and a mem­ber of the In­come Tax Special Court, Nx­as­ana sits in an ad­van­ta­geous po­si­tion – it seems he will not have too dif­fi­cult a time propos­ing the amend­ments to the laws of th­ese struc­tures.

Yet, the need to make such changes to leg­isla­tive frame­work that is in­tended to pro­tect the public’s in­ter­ests is a cause for great con­cern. Par­tic­u­larly the pro­posed amend­ments to the Sars laws which would see Is­fap loan re­pay­ments be­ing col­lected by Sars from loan re­cip­i­ents in a man­ner sim­i­lar to that of de­duc­tions such as tax and UIF from an em­ployee’s salary.

What would hap­pen if the Ikusasa donors were to gar­nish their re­pay­ment or­der with other fi­nan­cial obli­ga­tions by the loan recipient and send Sars an in­struc­tion to deduct this money?

What leg­isla­tive frame­work ex­ists to en­sure that this would not oc­cur with­out the Is­fap loan recipient’s con­sent? The so­cial grants cri­sis re­vealed to South Africans just how preda­tory PPP agree­ments can be­come if they are al­lowed to run unchecked.

Would ManCo and FundCo re­ceive ac­cess to in­di­vid­ual loan re­cip­i­ents’ per­sonal de­tails? If so, to what ex­tent will the in­for­ma­tion re­main con­fi­den­tial, and not be used for the private com­po­nent of the PPP’s own profit or gain?

Fi­nally, a crit­i­cal ques­tion that must ul­ti­mately be posed to the stake­hold­ers in­volved in Is­fap is, who are th­ese amend­ments de­signed to pro­tect? Should the Is­fap PPP model be im­ple­mented and fail, will it be the state or the private sec­tor stake­hold­ers who must ab­sorb the fall­out? If it is to be the state, then the public ought to be well aware of the gam­ble be­ing made with their tax monies.

Nx­as­ana is a ma­jor pro­po­nent of the pri­vati­sa­tion of basic ed­u­ca­tion, with his Si­fiso Learn­ing Group es­tab­lish­ing private schools around the coun­try.

All the while, or­gan­i­sa­tions such as the UN con­sis­tently warn against the dan­gers in­volved in the pri­vati­sa­tion of ed­u­ca­tion – not­ing the widen­ing gap they of­ten cre­ate in so­cio-eco­nomic and in­equal­ity lev­els in a coun­try.

Thus it is not dif­fi­cult to view the in­tro­duc­tion of Ikusasa pro­gramme as a pro­gres­sion from Nx­as­ana’s profit-mak­ing in the pro­vi­sion of basic ed­u­ca­tion into higher ed­u­ca­tion. A true com­mit­ment to the re­al­i­sa­tion of free ter­tiary ed­u­ca­tion in South Africa ought not fur­ther trap young peo­ple into debt with preda­tory loan schemes. It also should build on and ad­dress the chal­lenges in­her­ent in the public sec­tor fund­ing mech­a­nisms, and it must never be a method of driv­ing profit for big cor­po­rates.

The trend to pri­va­tise the pro­vi­sion of so­cial ser­vices un­der­mines the build­ing of a ca­pa­ble state in that it al­lows gov­ern­ment to ab­di­cate its role as the provider of th­ese so­cial needs, all the while driv­ing profit for big cor­po­rates, which fur­ther ex­ac­er­bates so­cio-eco­nomic in­equal­ity.

Higher ed­u­ca­tion may not be an im­me­di­ately re­al­is­able right ac­cord­ing to the Free­dom Char­ter, but its re­al­i­sa­tion must not be one that fur­ther traps young peo­ple in pre­car­i­ous eco­nomic sit­u­a­tions. Pro­grammes like Is­fap ought to be deeply in­ter­ro­gated for the sake of South Africa’s youth.

Fees Must Fall was about erad­i­cat­ing the ex­or­bi­tant cost of higher ed­u­ca­tion, not de­fer­ring it, while the rich be­come richer. Philile Ntombela-Mas­son is a re­searcher at Equal Ed­u­ca­tion (EE), Sis­esakhe Nt­labezo is gov­er­nance of­fi­cer at EE and Siba­balwe Gcil­it­shana is EE’s par­lia­men­tary of­fi­cer.

ALL ACA­DEMIC: Wits stu­dents gath­ered at Solomon Mahlangu House to be ad­dressed re­gard­ing the 2016 peace ac­cord.

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