Treasury yet to find the billions to fund #FeesMustFall

'A final decision on fee-free education is needed so that universities can decide whether or not their fees will increase in 2018,' writes Thulebona Mhlanga (Sebabatso Mosamo, M&G)

'A final decision on fee-free education is needed so that universities can decide whether or not their fees will increase in 2018,' writes Thulebona Mhlanga (Sebabatso Mosamo, M&G)

Free education for all qualifying students at university and technical and vocational education (TVET) colleges will cost between R17.7-billion and R40.7-billion more for the 2018-2019 financial year, says the treasury.

In the medium-term budget policy statement, the treasury estimated that, if the government were to fund 75% of these students, it would push post-school education costs up to 4.1% of gross domestic product by 2030.

This would double the present expenditure on higher education. It comes at a time when the government is struggling to balance its books and has pushed its borrowings to what many see as unsustainable levels.

The current post-school education and training budget is R76.7‑billion, increasing to R80.1‑billion next year and R88.8‑billion in 2019-2020.

The department of higher education and the treasury have been exploring various models to fund the full costs of higher education.

The white paper on higher education estimates that university enrolments will increase from 980 000 in 2015 to 1.6-million by 2030. It projects that enrolments at TVET colleges will grow from 730 000 to 2.5-million over the same period.

Based on targets set by the white paper, it is clear that free education will come at a high cost to government.

The treasury is busy cutting appropriations to national departments by R1.7-billion as part of its reprioritisation exercise to fund its competing priorities.

Although the National Student Financial Aid Scheme (NSFAS) has been allocated more than R40-billion to assist 450 000 financially needy students every year for the next three years, the treasury estimates that NSFAS will need minimum amounts of additional funding if free education is to be funded through it.

Looking at different scenarios of funding 30%, 50% and 75% of the student population at tertiary institutions, it predicts that funding:

  • 30% of undergraduate students will cause a R10.7-billion shortfall;
  • 40% of undergraduate students will cause a R17.7-billion shortfall;
  • 50% of undergraduate students will bring the shortfall to R24.9‑billion; and
  • 75% of undergraduates will cost R40.7‑billion.

Currently, the NFSAS funding model is based on a 50% split between bursaries and loans.

Assistance is provided to students whose families earn R122 000 or less a year. Proposals are under consideration to increase financial aid for more students from low- to middle-income families.

“The sector’s budget is the fastest-growing element in the education expenditure over the medium term,” said Finance Minister Malusi Gigaba.

The treasury faces the challenge of ensuring that needy students have access to tertiary institutions. But this will further increase the expenditure allocated to post-school education.

“Clearly, more needs to be done. The Heher commission of inquiry into higher education and training has delivered its final report to the president and we await the president’s determination and announcement in this regard,” said Gigaba.

The commission’s findings on free education were submitted to the president on August 31, making it almost two months since he received the report for his consideration and signature.

A final decision on fee-free education is needed so that universities can decide whether or not their fees will increase in 2018.

Outlining his plans for higher education and training, Gigaba said he will make further announcements in the budget next year.

​Thulebona Mhlanga

​Thulebona Mhlanga

Thulebona Mhlanga is financial journalist trainee at the Mail & Guardian, currently enrolled for a Master in Politics with the University of Johannesburg. Outside her fervour for business writing, reading and educating others around issues of financial literacy, she volunteers her time to women and issues on social justice. When she is not at gym, she is often out tasting food. Read more from ​Thulebona Mhlanga

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