​Billions potentially lost as universities stare down the barrel of a 0% fee increase

University of Cape Town students protesting on October 20 2015. (David Harrison, M&G)

University of Cape Town students protesting on October 20 2015. (David Harrison, M&G)

The country’s 26 universities would collectively lose R2.2-billion if government insists on implementing a 0% fee increase at universities next year.

This is the view of the Council on Higher Education (CHE), an advisory body to Higher Education Minister Blade Nzimande.

In a 17-page submission to the presidential commission appointed to investigate, among other things, the feasibility of a fee-free higher education system, the CHE said R800-million would be lost next year. This was in addition to the R1.4-billion that was lost this year, despite compensatory grants from government amounting to R1.9-billion.

Last year, according to the CHE, five universities were already “in deficit”.

“On top of that, 2016 saw 16 not able to meet their expenses (unless they had already made cutbacks). In 2017, 10 would decline further.
The universities are in a very weakened financial position.”

The CHE said part of the effect of this “weakened position” directly affected student financial aid.

“Many universities currently subsidise poor students, in addition to the NSFAS [National Student Financial Aid Scheme] students, and will not have sufficient income to continue this practice.”

At one university, for example, R100-million would not be available for bursaries, which meant that 1 167 students would be deprived of funding.

“A no-fee increase also means that those who are wealthy enough to pay an increase will be exempted; the poor, as in NSFAS-funded students whose fees are paid at university rates, will be in no better or worse position.”

The body said that NSFAS, even if it were to fund all eligible students to the average grant level, will experience a shortfall of some R400-million.

“The effect is that fewer poor students will be funded while the wealthy are exempted from increases.”

The ANC’s national executive committee recently took a resolution that the principle of no-fee increases in universities should remain in place.

Universities South Africa, a body representing vice-chancellors, is adamant that universities need an increase of at least 8% next year because anything less than that “is likely to compromise the financial health” of at least 17 universities.

According to the CHE, the longer it took for a new funding regime to be implemented, “the more the current higher education system will deteriorate in quality, as buildings and infrastructure damage will not be able to be repaired and backlogs addressed”.

A no-fee increase will also have an adverse effect on research production and postgraduate study because new research equipment will probably be unaffordable.

“Any new regime must therefore take as its starting point that an already underfunded system has become much less financially viable, and that quality in higher education will need to be restored amid all the other competing demands for government funding.”

The CHE said that even in fee-free systems “someone is paying for it”.

It quoted Egypt as an example where students at universities did not have to pay fees, adding: “Its public higher education system had suffered in terms of quality while the private sector, which charges fees, has burgeoned.”

The CHE said universities were expensive to run and that in fully government-funded systems “what can be funded becomes less and less leading to poorer quality education”.

This led to academic staff moonlighting at private institutions to supplement their income and the wealthy migrating to private universities.

The CHE also said that current inefficiencies in higher education — such as the poor through-put of students — needed to be addressed.

“Increasing access needs to be met with increasing chances of success. This could be done through restructuring the curriculum and improving schoolleavers’ preparedness for academic study.”

It would be fairer for all deserving students to receive government loans to be repaid according to a progressive system of interest rates, the CHE said.

This would involve students from highearning families repaying more of their loan while the very poor would have a greater portion of their loan converted into a bursary.

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