The South African Revenue Service (Sars) must provide information on the income of parents who apply for government funding for their children’s university fees, rather than relying on families’ estimates of affordability.
This was one suggestion put to the University of the Witwatersrand’s eight-member panel tasked with collecting proposals for submission to the presidential commission of inquiry into higher education funding.
Currently only students whose annual family income is below R122 000 are eligible for financial support from the National Student Financial Aid Scheme (NSFAS).
Another suggestion, in which Sars “could be more fruitfully employed” in various aspects of the higher education funding system, is to levy an additional tax on graduates once their income has exceeded a specific amount. This is similar to a system in the United Kingdom which requires students to pay back 9% of their income if it is above R300 000 a year.
“Such a system, linked to Sars, would have the additional advantage of ensuring compliance in the repayment of loans by those who can afford such repayments.”
Another proposal mooted was a “hybrid” model in which NSFAS fully funds a wide pool of students in the first year of study, followed by a private sector and company support scheme from the second year onwards.
“This proposal acknowledged that removing funding impediments in the first year provided students with the greatest chance of succeeding in bridging the gap between high school and tertiary education and that first-year success was a far greater indication of graduation potential than the matric results.”
As a result, companies would receive a better “return on investment”, according to the Wits submission.
“The emphasis [is] on completion because the proposal also includes a 100% ‘payback’ for those students who graduate.”
Among several other suggestions in the university’s submission are the tax rebate access (Trax) and special purpose entity (SPE) proposals. Trax is a public-private partnership aimed at unlocking about R25-billion a year. SPE is the creation of a special purpose entity, a privately managed, nationally based asset management fund, which would involve the SPE selling bonds and universities buying shares in the entity. Should 15 universities each contribute R5-million, the SPE would receive R75-million annually and be able to issue R750-million in bonds to companies and donor agencies.
“The main advantage of this proposal is that students would only repay the loan once their salary is R150 000 or more a year. These repayments would also be stretched over a period of 25 years.”
Professor Hlonipha Mokoena handed the 17-page submission to the commission of inquiry, headed by retired Supreme Court of Appeal Judge Jonathan Heher, which held hearings in Tshwane this week.
President Jacob Zuma appointed the commission following last October’s wave of student unrest over fee increases for this year. The protests were initially triggered at Wits after the university’s announcement of a 10.5% fee increase for 2016. The government then placed a moratorium on fee increases for this year and provided universities with R1.9-billion towards the R2.3-billion shortfall they faced.
The university’s submission stated that the government needed to rectify the steady decline in the subsidy it gave institutions.
“The panel is unanimous in its belief that government needs to play an important role in higher education funding due to the clear social justice obligations and needs to signal that it views higher education as a priority in South Africa’s social and economic upliftment by, at minimum, reversing the subsidy declines.”
Wits said the government spends only 4.7% of its revenue on the post-school education and training sector.
“We do believe that addressing inefficiencies and graft/corruption in the public sector can help release currently unavailable revenue but we recognise that addressing these issues will take time and effort.”
The university said there was an absence of a “systematic mechanism” to channel private sector funding to all universities.
“This is despite the fact that the private sector as a whole is a beneficiary of graduates produced from South African universities.”
According to Wits’s breakdown of funding from the private sector, it increased from R185.6-million in 2010 to R222.5-million in 2015.
Wits believes that the current funding crisis could be averted if there is a multifaceted approach in which government, private sector and university revenues contributed to the general wellbeing and sustainability of the higher education sector.
Mokoena said the university hoped the proposals would be useful to the commission.
Professor David Hornsby explained: “The models presented by the panel to the commission reflect submissions received from the Wits community.”
Wits vice-chancellor Professor Adam Habib said: “As a society, we need to ensure that the dramatic underfunding of the higher education sector is reversed and that the quality of the education on offer is not compromised in any way.”