​Fees must fall – but cautiously so

The main funding sources of higher education are the fiscus-based state subsidy system, tuition fees and third-stream income as derived from corporate and commercial activities, investment and donations. (Delwyn Verasamy, M&G)

The main funding sources of higher education are the fiscus-based state subsidy system, tuition fees and third-stream income as derived from corporate and commercial activities, investment and donations. (Delwyn Verasamy, M&G)

COMMENT
The question of fee-free education has been a priority of our government. One has to accept that, today, the fee-free education call is even more important than it may have been in the past, given the current situation in our post-school education and training sector.

This calls every one of us to come together as those who value education.

We must all applaud the participation of those who continue to contribute to the presidential commission of inquiry into higher education and training funding. There have been a number of platforms outside of the commission that continue to afford various voices an opportunity to share opinions and propose solutions.

We must not shy away from the fact that our country has, in many areas, made remarkable progress since the dawn of democracy. We must also remember where we come from as a country.

We must all acknowledge that more still needs to be done to change the lives of our people, but this should not blind us to the successes we have achieved as a country.

The National Development Plan (NDP) says it is categorically clear that education, training and innovation are central to South Africa’s long-term development.

The document goes on to say these are the core elements in eliminating poverty and reducing inequality, and the foundations of an equal society.

The NDP envisages a robust education system covering early childhood development, primary, secondary, tertiary and vocational education as crucial for addressing poverty and inequality and also makes recommendations for policymakers on several fronts.

The NDP has guided a number of government policies, including the White Paper for Post-School Education and Training, which is also in line with other key national policy documents, for example, the National Growth Plan and the Industrial Policy Action Plan.

The white paper also seeks to set out a vision for the type of post-school education and training we aim to achieve by year 2030.

It outlines policy direction to guide the department of higher education and training and institutions for which it is responsible in order to contribute to building a developmental state with a flourishing economy.

According to Statistics South Africa (Stats SA), more than three million young people are disengaged from education and work.

The organisation for Economic Co-operation and Development reports that about one-third of those aged 15 to 24, or 3.4-million people, are not formally employed nor in education or training — and two million of these young people have not finished grade 12.

Without a doubt, these figures represent a profound challenge for South Africa, and this certainly calls for an economy that is vibrant to respond to such problems and in particular, among others, a constantly responsive education system as envisaged in the white paper.

Our government has, on a number of occasions, been accused of not giving education the priority it deserves.

In many instances our education system has been compared with those of other developing countries such as Cuba.

Let us look at the Cuban education system. Early last year, Cuba was reported as having a population of 11 047 251. The education system in Cuba is 100% subsidised by the government. The World Bank 2014 Report states that Cuba has the best education system in Latin America and the Caribbean and the only country on the continent to have a high-level teaching faculty. Cuba allocates the highest share of its national budget, 13%, to education.

We can’t take away the fact that economic growth in South Africa has been respectable but recent statistics have shown that it has been weaker than many emerging economies.

Stats SA recently reported that South Africa’s gross domestic product (GDP) grew by 3.3% quarter to quarter in the second quarter of 2016. This is after contrasting by 1.2% in the previous quarter.

The economy has been growing very slowly. According to Stats SA, this year’s growth rate tells the same story as the past three or four years in terms of GDP growth.

Government has always been aware of these problems and takes them seriously.

We are committed, as government, to realise fee-free post-school education for the poor and working class and to assist middle-class families who are unable to pay.

Just this year the higher education department received an additional 18% for 2016-2017, with an average annual increase of 9.8% across the medium-term expenditure framework period up until 2018-2019. From R42-billion in the 2015-2016 financial year, the department’s budget is set to rise to R53-billion in 2018-2019.

This means universities and students will receive an additional R17-billion over the next three years, as was announced by the minister of finance in the recent medium- term budget policy statement in Parliament.

The R17-billion includes the R7.6-billion to universities to compensate for the fee freeze for students whose families earn less than R600 000 a year and another R9.2-billion to bolster the National Student Financial Aid Scheme.

The higher education department has, after an extensive consultative process, advised that a fee adjustment for 2017 cannot go above 8%.

Government has this year provided R1.9-billion of the R2.3-billion shortfall resulting from the subsidisation of the 2016 university fee increase.

This contribution by government might not be enough to cover everyone but it will go a long way towards assisting needy students.

The main funding sources of higher education are the fiscus-based state subsidy system, tuition fees and third-stream income as derived from corporate and commercial activities, investment and donations.

Universities receive state funds called block grants and earmarked grants. Block grants comprise about 70% of the total state budget towards universities. They are intended for the operational costs of teaching and learning and are council-controlled funds, which can be used at the discretion of council and university management.

As from 2015-2016, it was approved that, for many of the earmarked grants, 20% be released to the universities during the first quarter of the department’s financial year, based on the approved plans for the use of the grants.

The 2015-2016 and 2016-2017 Ministerial Statement on University Funding outlines a more detailed view of the block and earmarked grants. It is this view that gives a clear picture of how universities spend their budgets.

Briefing Parliament on the 2015 financial statistics on higher education institutions, the statistician general, Pali Lehohla, cautioned that we shouldn’t deceive ourselves about fee-free education.

“There can never be fee-free education, let us not deceive ourselves.  Rather we should focus on finding a workable model,” he said.

Differing voices have surfaced regarding fee-free education, with some confident of its possibilities.

It is important that, as we strive for fee-free education for the poor, we tread warily and not rush our decisions.

“If tuition fees dried up, as would be the case if a fee-free higher education policy were to be adopted prematurely, the country could suffer severe consequences,” according to Universities South Africa.

Universities South Africa gives the following examples as consequences the country could suffer should a fee-free education policy be adopted prematurely:

  • Unavoidable budget cuts could lead to retrenchments;
  • The quality of higher education could be compromised;
  • Research could become compromised and academics demoralised; and,
  • Universities could curtail their study offerings.

The Heher commission of inquiry has kicked off the second phase of its public hearings into the feasibility of fee-free higher education in South Africa.

We need to allow the commission to complete its task and to provide its recommendations for the higher education sector.

While we wait for the recommendations of this commission, our university system has to continue functioning and empowering students from around the world, particularly in the South African Development Community.

William Somo is a communication and media liaison officer in the department of higher education. These are his own views.

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