SA not skimping on campus fees, but …

The #FeesMustFall protests have highlighted the dire financial situation of many South African students. For years, the government’s subsidy to universities has failed to keep pace with increasing student numbers and the rising costs of their education. As a result, an increased share of the burden has shifted to the fees they must pay.

Many students cannot afford them and loans via the government’s National Student Financial Aid Scheme (NSFAS) to the poorest students are inadequate. Nor are they available for families of modest means, such as those whose breadwinner is a policeman or nurse.

For many poor and “missing middle” students, academic progress is disrupted or ended because of their inability to pay fees.

The hardship and heartache many students face should not be underestimated. There are overwhelming moral and social grounds for greater assistance to enable poor students with the required academic criteria to complete their studies.

There are strong economic reasons too. Skills in SA are in short supply. We cannot afford to lose potential graduates for lack of funding.

However, finding a workable and sustainable solution in a society as unequal as ours is not easy. It does not help pretending there are easy answers.

Two claims permeate the debate. The first is that university tuition is free “in many countries”. The second is that our government spends much less — if spending matched global norms, we could provide affordable quality university education for all. Sadly this is not so.

The Organisation for Economic Co-operation and Development (OECD) is a “club” of the world’s 35 richest countries. The state’s share of tertiary funding averages 70% in these countries. In Korea, Chile, Japan and the US, the share is less than one-third.

Australia spends just more than 40% – on par with SA. Including NSFAS loans, our government share is 53%. Only in the Nordic countries, Austria and Argentina is the government’s share more than 90%. The rest comes from companies, private foundations and student fees.

It is unusual for fees not to form part of university funding. In some cases they make up only a small portion, but on average fees contribute about 20%.

In Chile, the US, Japan and Korea, fees cover more than half the total cost of study. In SA fees represent one-third (including NSFAS loans).

Across the OECD, government spending on university education averages 1.1% of GDP. Government spending on tertiary education averages 1.3% of GDP in the 28 members of the EU.

The South African budget has earmarked R31.6bn (0.67% of GDP) for university subsidies and infrastructure in 2017-18. To this must be added the state’s R15.6bn annual allocation for NSFAS loans for the poorest students, bringing state spending to just under 1% of GDP. An additional R2.46bn allocated in the medium-term budget raises the contribution to 1.04% of GDP. This is in line with average government spending in the OECD.

The World Bank provides another measure, by comparing government tertiary spending per student as a percentage of national per capita income. SA’s “score” of 37.9% places us squarely in the middle of the 99 countries in the World Bank ranking.

By comparison, the average for OECD countries is 41%.

So by global standards, the South African government is not skimping on university spending. Nonetheless, it is clear the funding formula is not working and needs urgent review. Too many students and their families are subjected to undue hardship and deserving students are excluded for financial reasons.

Things are further complicated by our young population. This means our demands for education are proportionally much higher.

This suggests a blended system is needed where those who can, pay for university, while others pay what they can afford and are aided by grants and loans. Clearly, this will require more from the state, and the amounts need to be carefully calculated.

A resolution to all this is urgent. We cannot afford another year of campus turmoil, with long-lasting damage to that part of our public education system that functions rather well.