With the government unlikely to increase subsidies for tertiary education in the next 10 years, a large-scale student-aid fund is desperately needed, argues Philippa Garson
SERIOUS problems lie ahead for the higher education sector if student fees continue to rocket in the absence of a viable student loan scheme.
While the sector is set to expand at a rapid rate, bringing far more students in to higher education, most of them will be financially needy and unable to pay fully for their studies.
At the same time, with state funding directed at redressing imbalances between the poor and rich provinces whittling away funds from the national coffers, it is unlikely that government funding of the sector will increase in the next decade, says the National Commission on Higher Education’s finance task group.
The government currently contributes around 60% of the total cost of higher education (R9,6-billion). It poured R5,6-billion into higher education for the 1995/6 year — almost 2% of the gross domestic product. The remaining R4-billion comes from student fees (20%), residence fees, private donors and investment incomes. Private spending on universities and technikons and private colleges injects around R1-billion into the system.
The government’s spending on higher education has increased by just over 2% in the past five years. But student enrolment is on the rise and the government is unlikely to subsidise the sector more than it already does.
Unlike most other African countries, which fund up to 100% of the higher education bill, South Africa is ranked among five countries in the world — the others being Israel, Japan and Chile — which depend the least on the government for their higher education sector funding.
This low dependence on the state has worked for the wealthier formerly white universities given their links to the private sector, enhanced abilities to raise funds, and their comparatively richer students.
But for the black universities — conned into relinquishing full state subsidies and accepting the same complex formula funding system as their white counterparts in return for greater autonomy — this system has led to financial disaster.
Member of the finance task team, Professor Ian Bunting, says: “We have recommended that the whole funding system be scrapped. Most people have accepted it’s an apartheid legacy they can’t retain.”
The funding formula has also worked against higher education’s ability to meet the graduate needs of the country. It has encouraged institutions to increase their enrolments in the cheaper humanities fields, not in science and technology, and has added to the problem of too many unemployable BA graduates and too few science graduates.
Inefficiences, duplication of academic activities, high drop-out rates and ad hoc cuts to subsidies have created a climate of severe financial instability in the sector. By 1993, the combined debt for unpaid fees in universities and technikons amounted to R140-million.
The proportion of the 18-to-21-year-old student- going population enrolled in higher education (18%) is much greater than in other African countries, where an average of 3% of this section of the youth is in higher education. The comparatively high figure in South Africa is largely accounted for by the many white students who study beyond school. Of the 700 000 students in the sector, 60% are white.
A first-to-third year social science student costs the government around R14 000 a year, estimates professor Jerry Steele, another member of the finance task group. Engineering, medical and some natural science students cost up to three times as much. Technikon students are relatively cheaper, costing the state around R11 000 a year.
Steele says that it is imperative to reduce the per capita cost of higher education, and a student loan scheme is being seen as the only realistic way to address the problem — along with a revamped funding scheme that ploughs more “redress” money into the poorer universities and sets aside “earmarked” funds for crucial areas of study.
Meanwhile, the government has put R300-million into student financial aid and has promised to inject this amount every year for the next three years to help get a viable, self-financing scheme in place.
The Eminent Person’s Group — a high-powered taskforce made up of academics and business executives set up last year by the Education Department — is expected to raise another R300- million from outside sources.
But some estimate that close to R1-billion is needed in aid for this year alone. In 1996, close to 60 000 students will have been assisted, with an average loan of R5 000 per student.
Three components are crucial for a properly functioning scheme, says the Tertiary Education Fund of South Africa director, Roy Jackson, whose organisation manages the loans and bursaries fund. These are, he says: apt legislation, effective recovery methods and an efficient administration.
The Special Funds for Tertiary Education and Training Act of 1993 allows for the recovery of money at renumeration source — giving the loanee the right to compel a student’s employer to deduct money from his or her salary cheque, or face responsibility for the loan him or herself.
But with unemployment levels as high as they are, many students are unable — and will continue to be unable — to pay back the vast quantities of money they owe for their higher education. Clearly, there is a need for creative solutions like community service or the establishment of a “peace corps”. But not enough attention is being given to such options.
Management of the loan fund by an agency seperate from the state, like the Tertiary Education Fund of South Africa, is also critical for the efficient management of money and erradication of the kind of red tape delays that can trigger student protests. Furthermore, “if students sense there is a crisis on the go, they won’t repay their loans,” says Jackson.
He is optimistic that the government’s seed capital loan of R1-billion over the next three years, sound recovery methods, a smoothly-functioning delivery system, and more money from international and private donors are all it takes for a more successful, more equitable loan system. Unless he proves right, the lofty new policy goals for higher education could never see the light of day.