AN AVOIDABLE CRISIS
Protests at universities marked the beginning of the academic year, but the rage on campuses and anger at higher education authorities should have been foreseen
SA universities opened belatedly in mid-March after protests on many campuses sparked by a combination of factors related to student fees and debt.
The National Student Financial Aid Scheme (NSFAS) could not guarantee payment for all first-year students who qualified to register, and some universities refused to register students with outstanding debt. Wits University said it was owed R1bn.
Responding to the turmoil, a Sunday Times editorial on March 14 stated that “yet again, the government gets a failing grade for its handling of student aid”.
The editorial argued that, after raising the expectations of students when then president Jacob Zuma in December 2017 announced free higher education for poor students, the government should have sensed that the start of the academic year would be a critical moment, and should have prepared with care and sensitivity.
One would have expected the same level of preparedness by the universities, and that the government and the universities would have been communicating about the spectre of student fee protests.
From evidence at the Zondo commission, it is clear that Zuma offered students free higher education to gain popularity when he also knew his cronies had been stealing the money that could have supported student financial aid.
A brief history
In 1995, then president Nelson Mandela appointed the National Commission on Higher Education to develop a policy framework to transform higher education.
The three aims were increased and more equitable participation, greater responsivity to social and economic issues, and greater co-operation and partnerships in governance structures and operations.
The commission’s report said student financial aid schemes would be critical because it understood higher education could not be transformed without a dramatic increase in participation by black students.
Progress achieved through public funding reforms could be negated by inadequate and ad hoc student financial aid policies that are at cross purposes with institutional and tuition fee policies, the commission warned — and, to a large degree, this is what has happened.
The commission proposed a mixed bursary and loan scheme and emphasised that diversified ways should be explored to help students repay loans. It also recommended that the scheme should be extended to part-time and private institutions.
Two central issues the commission did not resolve are worth mentioning. The first involved Peter Scott and his influential 1995 book The Meanings of Mass Higher Education, which argued that a central feature of socioeconomic development was a differentiated and massified higher education system.
On one hand, a much larger proportion of the population must obtain post-school education to respond to new higher-level skill needs. Equally important is a differentiated system with higher education institutions that specialise in high-level professions and new knowledge production.
The notion of differentiation was opposed within the commission, particularly by retired rectors of historically black universities who wanted redress, with the aim of SA having about 20 or so “University of Cape Town-type” universities.
There was strong support for massification within the commission, but the National Treasury was adamant there was not enough money to support it.
Rise and demise of NSFAS
It could be argued that the rejection of differentiation and massification is at the heart of the student aid crises and a significant factor in SA’s economic stagnation.
Another idea the Treasury rejected was a system of income-contingent loans successfully used in Australia. Education is fee-free and loan repayments start after graduation. They remain low for a decade, then gradually increase — even as far as near-retirement in some cases.
Loan repayment is part of the tax system, so students do not have to repay if they are unemployed or earn less than the taxable income threshold. And the system is handled by the Treasury, which precludes the need for an additional NSFAS-type bureaucracy.
In 1999, NSFAS replaced the Tertiary Education Fund of SA and its role was to transfer money to universities, which then allocated it to deserving students. It also collected student loan repayments.
NSFAS became a much-admired student grant and loan scheme, and was studied by a number of countries. But by 2008, as the scheme grew, administrative problems had begun to emerge at NSFAS head office and a few historically black universities.
Instead of providing these universities with administrative support, NSFAS was nationalised into a kind of state-owned enterprise with an ever-increasing staff complement and rising student debt.
Following the establishment of the department of higher education in 2009, the minister at the time, Blade Nzimande, pressurised board members to resign even though they were in the middle of implementing a turnaround strategy.
The arrival of a new CEO, appointed through the cadre deployment process, was followed by the departure of skilled staff. A former NSFAS employee described this process as “deprofessionalisation”.
From 2009, debt collection collapsed and within five years uncollected debt had reached R3.7bn. At the same time the government’s contribution was shrinking, to 40% in 2013 from 49% at the turn of the millennium.
Student fees, meanwhile, rose from 24% of university income to 33%, and inflation in the university sector was almost double the national average. Over the same period, the proportion of students on NSFAS increased from 2% to 13%.
The government drastically increased NSFAS funding from R1.4bn in 2010/11 to R3.9bn in 2014/15 and R24bn in 2019/20, but the flood of money and reduced debtcollection capability due to deprofessionalisation overwhelmed the organisation.
In 2018, pressure started mounting for then higher education minister Naledi Pandor to fire the CEO of NSFAS and disband its board because of problems disbursing money for students who were promised free education.
After two calamitous years under an administrator, parliament decided in November last year to hold an inquiry into NSFAS corruption allegations. And on March 10, as student protests began on SA campuses, the select committee on education heard that irregular and wasteful expenditure continued to emerge as NSFAS accounts were reconciled. Irregular expenditure already identified amounted to R7.5bn in 2017 and 2018.
The auditor-general also highlighted NSFAS’s failure to consult the minister in revising the criteria and conditions for loans and bursaries in 2018/19 and in 2019/20, resulting in NSFAS carrying irregular expenditure of R50bn.
In a recent television interview, former statistician-general Pali Lehohla said NSFAS was unnecessary, and that there were better and more efficient ways of dealing with student financial aid.
What did China do? The Chinese government responded to the Tiananmen Square youth protests with a new higher education law in 1995, which declared higher education a pillar of socioeconomic development.
Three main strategies were massification with strong differentiation, a dramatic increase in government spending on higher education, and the introduction of tuition fees with a loan scheme. By 2020/21 China had 15 universities in the top-100 world rankings. No other developing country, including SA, has one.
The Chinese model shows that higher education is not just a free path out of poverty into the elite, it must be one of the pillars of socioeconomic development, with a pact between different role players. One of our problems is that the ANC does not even have a pact with itself.
The Heher commission proposed an income-contingent loan system that would result in fee-free education for some students who did not earn enough in their working life to meet a repayment obligation.
Application and registration fees would be scrapped across the board and students with debt, who had graduated, would be offered income-contingent loans as well.
The commission also recommended that tuition and residence fees should be paid directly to the institution and that NSFAS be replaced with income-contingent loans administered by the Treasury. This proposal is close to the tried and tested Australian model.
What SA should avoid are models similar to those adopted in many African and Latin American countries: free higher education with large undergraduate classes, small postgraduate programmes and low research output.
Nzimande has already announced that his department will not fund postgraduates and that funding of master’s and doctoral students will be left to the National Research Foundation, an agency that has been subject to budget cuts.
It will be a great irony if Nzimande, who did not agree with Zuma in 2016, leaves as his legacy a dysfunctional student financialaid scheme and the transformation of Africa’s most successful university system into a low-level training system.
He could well then be described as the director of what he has described as an “annual soap opera of student protests”, with screenplay by Zuma and casting by the new aspirational elite.
No clear indicators
The higher education financial crisis was not identified and acted on because of, among other things, a lack of financial analysis expertise within the department of higher education, a possible disconnect between the department and the Treasury, and almost certainly between policy and politics.
There are no clear indicators in the reporting system about which institutions are heading for a financial crisis and there is no accurate reflection of student debt of the proportion that can be recovered.
Nor is there any forum or space where those who bear the burden of the student debt crisis can meet on a regular basis to anticipate and respond to looming issues before they spiral out of control.
The crisis comes as no surprise. The outcomes were foreseeable.
What has been missing in the higher education landscape is the active and co-ordinated intersection of systematic and reliable indicators with institutional actors and policymakers who provide both oversight and foresight.
China responded to youth protests with a new higher education law in 1995, which declared higher education a pillar of socioeconomic development
✼ Cloete is higher education research professor and Van Schalkwyk is a post-doctoral research fellow at the department of science & technology National Research Foundation Centre of Excellence in Scientometrics and Science Technology and Innovation Policy at Stellenbosch University. Cloete chairs the board of University World News-Africa , where a full version of this edited commentary was first published. https://www.universityworldnews.com/post.php?story=20210324220438212