Fee-free education not a panacea to higher education challenges

Since the announcement of fee-free education by former President Zuma in December 2017, many people and organisations in the Post School Education and Training (PSET) system have grappled with the practicalities of “adequately” funding students. The Department of Higher Education and Training (DHET) currently finds itself dealing with a new wave of student protests linked to this at some level –  from issues related to historic debt to registration, tuition, meal allowances and accommodation. In light of all these challenges and the ever-changing environment, private donors, corporate foundations and development institutions are asking themselves hard questions about their role and purpose in the PSET system.

As policymakers, universities, practitioners, funders and other key stakeholders ponder the question of “sustainably” funding PSET, it is important to take a step back and reflect.

When #FeesMustFall started in 2016, “historic” student debt of R9 billion[1]was already owed across all Institutions of Higher Learning (IHL). Added to this, the National Student Financial Aid Scheme (NSFAS) loan book sat at R29 billion at the end of 2016.

Furthermore, as many student financing models were developed and subsequently presented to the Fees Commission, it became clear that the budgeted government subsidy alone would not be enough to fund higher education: R60 billion[3]is required to fully fund the studies of poor and “missing middle” students across the country. Given this sobering amount and South Africa’s fiscal limitations, alternative funding models are urgently required.

Funding alone is not the panacea however, nor does it guarantee improved success rates at IHL, Technical and Vocational Education and Training (TVET) and Community Education and Training (CET) colleges.

So, given the plethora of challenges facing the PSET system, what can the government and private sector do collectively?

As Tshikululu, we have managed many corporate foundations who invest in the PSET system and our experience points us to three fundamental issues.

The first thing needed is a functional and effective NSFAS.This is probably the single most important lever for players in the space given both the political and societal attachment to this scheme. The time has come for NSFAS to move into a new dawn; one that embraces innovations from social partners.

One of these social innovations is the Ikusasa Student Financial Aid Programme (ISFAP), which is funded by some of our clients. ISFAP has student “wraparound support” mechanisms that provide academic, social, pyscho-social and mentoring assistance to students, enabling them to succeed in higher education. The NSFAS cap of R78 000 per student, which will potentially disappear with the introduction of fee-free education, doesn’t allow for this comprehensive approach to student support. The relationship with the student is purely financial, leaving students to source and fund all the other types of support they need to succeed. Given many of the constraints and challenges facing universities, particularly Historically Disadvantaged Institutions (HDIs), many of these support systems are not fully in place or readily available, meaning that students often struggle to pass at levels appropriate for them to make it into postgraduate schools or the world of work.

The ISFAP pilot, now in its third year, has begun to show evidence of success which can be directly linked to access to wraparound support. As such, it provides useful lessons for all stakeholders in the system. It stands in contrast to the alternative approach taken by some corporate foundations which partner with private bursary providers to fund the “shortfall” resulting from the NSFAS cap. (This is not an ideal arrangement as whoever funds a student should fund them fully – both from an accountability and sustainability perspective.)

Another key lesson we’ve learned is the need to supplement academic/tutorial support with student mentoring/coaching and orientation/induction. These are particularly crucial at first year, as approximately 15 – 20% of students drop out after first year, with up to 30% dropping out by year five.

Some private donors go to the extent of having a dedicated psychologist or mentor/s for their students. This might be unrealistic at a system level, but NSFAS can certainly learn from these foundations as the benefits are now limited to tiny number of students rather than the system as a whole. This applies to the university, TVET, and CET colleges as well.

The second major issue that needs to be comprehensively addressed is that of historic debt.Historic debt prevents academically and financially deserving students from graduating upon completion of their final year of study. This challenge is also partly due to NSFAS funding limitations and universities’ ballooning costs as a result of the declining state subsidy.

This is a complex issue. On one hand, universities and TVET colleges have growing pool of bad debt they have to address to remain sustainable, and the other you have students being denied an opportunity to make a living. Corporates are often expected to “pick up the tab”. Government is also hamstrung as it is technically a matter between the university and the student, thus creating a moral hazard for society at large. Although we’ve advised our clients to help students to graduate, the issue requires other stakeholders, not just corporates, to come on board.

Our view is that the best way to address this is for universities, government, students and corporates to have a robust discussion about “how best” to confront it. It might require sacrifices from all parties for the betterment of the country; universities will have to write-off some of the debt, students will have to pay the reduced debts and corporates can step in to provide this temporary relief for the students. Government will need to find a mechanism of incentivising universities to write-off this debt, as funding PSET is the primary responsibility of government.

The last, and perhaps equally fundamental issue, is that of postgraduate support.Recently, organisations including theNational Research Foundation (NRF) have had to cut their funding. As a result, some of South Africa’s best researchers lost up to 90% of the funding they received from the research incentive grants programme.

In addition, the NRF only supports about 10% of the total postgraduate population nationally, leaving a huge gap for those wanting to pursue second or third degrees. This requires a coordinated effort, particularly given the limited number of black African academics with doctoral qualifications or post-doctoral training. Funding Honours and Masters’ studies will build the pool of academics who can potentially become professors in 10 – 15 years. Tshikululu has worked with a key client to fund postgraduate study in partnership with the NRF and other key stakeholders in the system.

Although these proposed solutions are not exhaustive, they will no doubt contribute to finding more sustainable funding and academic support solutions in the PSET system. Full cost of study without effective wraparound support will not yield the intended results. Funding postgraduates without addressing the inherent debt which prevents many students from enrolling in second or third degrees in the first place, may also limit the potential impact on the system. Fee-free education alone cannot even begin to address systemic challenges inherent in the current system. What is required is a joint effort: one that explores many funding avenues from the fiscus to private foundations, skills development levies and even impact investing. This is what we think will achieve stability and sustainability in the PSET system.