Zuma offers “grants not loans” plan

Just as the ANC’s elective conference began on Saturday morning, President Jacob Zuma released a statement announcing that poor first year students at South African universities would be fully supported through “government grants not loans”.

The Commission of Inquiry into Higher Education recommended an income-contingent loan model to fund higher education students, where loans would be sourced from commercial banks.

But Zuma has instead said that government grants would subsidise those first year students categorised under a reworked definition of working class students. Free education, he said, would be available to these student in 2018, which is less than a month away.

A fully subsidised education will include, according to the Presidency, tuition fee, prescribed study material, meals, accommodation and/or transport.

“Having amended the definition of poor and working class students, government will now introduce fully subsidised free higher education and training for poor and working class South African undergraduate students, starting in 2018 with students in their first year of study at our public universities.
Students categorised as poor and working class, under the new definition, will be funded and supported through government grants not loans,” the Presidency said in a statement.

The president re-defined poor and working class students to: “currently enrolled TVET Colleges or University students from South African households with a combined annual income of up to R350 000”. The quantum, the presidency said, would be assessed periodically by the higher education minister and the finance minister, who would consult on the issue.

Prior to Zuma’s announcement, students who relied on NSFAS could only apply for a loan if their household earned R120 000 or less. Students considered to be in the ‘missing middle’ (those in households earning more than R120 000 but less than R600 000) would have to find bursaries or make other sacrifices in order to pay tuition.

In September 2016, then higher education minister Blade Nzimande announced that missing middle students would be exempt from fee increases for the 2017 year. Zuma’s latest policy change, means first year students in this threshold will have a free education grant in 2018.

Zuma’s announcement was released as members of the ANC national executive committee (NEC) sat in a meeting on Saturday morning. The ANC is currently in the first day of its national elective conference where delegates are expected to vote for the party’s new president later in the day.

The plan appears to have ignored recommendations made by the higher education commission of inquiry, chaired by retired judge Jonathan Heher, which said that commercial banks would play a key role in providing loans to fund fee free education for students. Zuma did not mention the income-contingent loan model the commission proposed in his announcement. He also made no mention on how government would fund grants for poor students.

The president’s solution includes:

NSFAS goes from loan to grant

The National Student Financial Aid Scheme (NSFAS) loan system will be converted to a“100% grants effective immediately”. Students on the NSFAS system are usually required to pay back their loan when they leave university and begin earning an income. But now, in their further years of study, they will instead receive a grant that will be administered by NSFAS.

Government increases funding to post-school institutions

The government subsidy to post school education and training institutions will increase from 0.68% to 1% of the GDP in the next 5 years. This solution was also proposed by the fees commission.

Poor TVET students to receive free education in 2018

“The provision of fully subsidised free education and training will be extended to all current and future poor and working class South African students at all public TVET colleges starting in 2018 and phased-in over a period of five years,” the Presidency said.

These students will be funded through grants, and TVET colleges will receive further support from government to improve development and the quality of education.

No fee increment for poor students at public universities

Public university students who live in a household that earns less than R600 000 a year will be exempt from a fee increment in 2018.

“This policy intervention will enable government to extend fully subsidised free higher education to youth from well over 90% of South African households. Duly, from 2018 onwards, eligible South African children of the unemployed, social grant recipients, South Africans earning below a minimum wage, domestic workers, farm workers, mine workers and entry level civil servants… will now access public universities and TVET colleges for free through grants provided by their government,” the Presidency said.

Historical debt to be discussed

The higher education minister will be responsible for dealing with debt accumulated through NSFAS loans after a due diligence has been completed by the higher education ministry, planning, monitoring and evaluation department and the National Treasury to work out the extent of funding needed.

Student accommodation to be prioritised

Accommodation at historically disadvantaged universities will be addressed “urgently”.

Zuma also said government would investigate the viability of online and blended learning in South Africa and also work on ways to help post-school institutions transform.

But for all of this, the president has yet to say how government will produce an estimated R13-billion to fund this policy from the budget.

In November, the Mail & Guardian reported that a treasury document had been put before President Jacob Zuma by the presidential fiscal committee, outlining possible areas where budgets could be slashed to find the money. The proposal, which was driven by Morris Masutha, an ex boyfriend of Zuma’s daughter Thuthukile, came at a time when the country is facing an unprecedented R50.8‑billion revenue hole.

Masutha was involved in the Fees Must Fall movement and also an advisor to Zuma. Masutha, who heads up the Thusanani Foundation, has not responded to any news reports on the issue. But in a proposal the foundation made to the fees commission last year, it estimated that free tertiary education for poor and working-class students would cost a “conservative” R35‑billion to R40‑billion.

Ra'eesa Pather

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