Long road to success: Students gather outside the University of Johannesburg campus to register for class on January 8. The Department of Higher Education and Training estimates free tertiary education will be phased in over five years, while the Treasury will provide more details on the plan in the February budget. Picture: VELI NHLAPO
Long road to success: Students gather outside the University of Johannesburg campus to register for class on January 8. The Department of Higher Education and Training estimates free tertiary education will be phased in over five years, while the Treasury will provide more details on the plan in the February budget. Picture: VELI NHLAPO

President Jacob Zuma’s surprise announcement that the government will provide free higher education to the poor has sparked fear of a budgetary meltdown and evoked visions of universities being stormed by mobs of school leavers demanding to be enrolled regardless of their academic capacity.

While the December 16 declaration that grants will be provided to cover tuition and living costs for undergraduate students from households earning less than R350,000 a year side-stepped the normal budget process and sent the Treasury scrambling to find the money, predictions of a doomsday scenario now look overblown.

The new plan will be phased in, and estimates of the funding gap for 2018 range between R12bn and R15bn. The money can be found if the government prioritises tertiary education, says Renfrew Christie, former dean of research at the University of the Western Cape.

"Unfunded mandates happen everywhere. It is part of the budget debate and is not unusual. The steps forward are often painted in very glowing terms, knowing that they will be trimmed down later," he says.

"Clearly there was a need to meet the political demand for free higher education. The president has clearly left the problem for his successor, but there may be scope to unwind it."

To date, neither Zuma nor anyone else in the government has provided estimates of how many students are likely to fall into the free undergraduate studies net, or quantified what it is expected to cost.

The government also hasn’t spelt out the financial implications of Zuma’s directive to switch Technical Vocation and Educational Training (TVET) college loans to bursaries.

While the Department of Higher Education and Training initially said free tertiary education would be phased in over five years, Finance Minister Malusi Gigaba put it at eight years. The Treasury said details would be provided in the February budget.

Ahmed Bawa, the CEO of Universities SA which represents 26 institutions, sees the no-fee plan as feasible for this year, but expects the public purse to come under mounting strain as increasing numbers of students qualify for grants in the years to come.

"We have been assured by the Department of Higher Education that the money for this year is available. We have to take the department at its word and have assumed that is the case," he says. "The big question is what happens two or three years from now?"

Universities have no intention of suddenly opening their doors to thousands of students that they don’t have the capacity to accommodate, despite the EFF’s call for those who wanted to study, but had not applied, to descend on campuses and to demand being accommodated.

Universities have five-year enrolment plans that were determined in consultation with the Department of Higher Education and Training and these have not changed since Zuma’s announcement, says Bawa.

Many universities are so over-subscribed that they simply don’t have any more places available this year.

The University of the Witwatersrand, for example, received 56,901 applications in 2017 for 5,664 first-year undergraduate places in 2018.

Wits plans to reduce its undergraduate numbers to accommodate more masters and PhD students, a shift agreed to with the Department of Higher Education and Training, says vice-chancellor Adam Habib. For now, anyone who pitches up at the university hoping to a secure last-minute enrolment place will be given assistance to use its new central application system, he says.

"I am convinced free higher education is good for society as it enables inclusion. My question is how do you do it sustainably and measuredly in a context where you have a R50bn budget deficit, low economic growth and political instability," says Habib. "I would have done it through a loan system, and as the economy improved, shifted it to a grant system."

The fact that Wits receives 10 times more applicants than it can accommodate reflects the hard reality that TVET colleges are, by and large, a dismal failure and a university degree is the best guarantee of securing a decent job in SA, says Trade and Industrial Policy Strategies economist Neva Makgetla.

The median income for people with a degree was R17,000 a month in 2015 — almost six times higher than the R3,000 median monthly income for people without one, she says.

"When you have a very unequal society, social mobility is vital. If a poor kid manages to get a university exemption and then can’t go for lack of money, it is just wrong," she says.

Makgetla argues that grants are a much fairer way to fund poor students, for whom the prospect of loans is terrifying.

Nic Spaull, a senior researcher in the economics department at Stellenbosch University, agrees that students shouldn’t be turned away because they can’t pay, but takes issue with Zuma’s cart-before-the-horse approach.

"One cannot simply wave a wand and make unfunded declarations. I am told that many high-level Treasury officials found out about the details with the rest of the country watching television," he says.

"The budgeting process is really where the rubber hits the road on the competing priorities of the government. Should one take money away from things like health, housing or social grants to pay for free higher education? If not, then where should the money come from? Increased taxes or borrowing? Fine, but then those need to be costed and announced together with the announcement of free higher education."

Much of the initial pressure of implementing the new fee plan falls on the National Student Financial Aid Scheme, the conduit for government funds to support poorer students. It is scrambling to make the necessary arrangements.

"We need to double our human resources, build new systems for [awarding] bursaries, and we have to find new ways of working with institutions to make sure we don’t oversubscribe the system," says its CEO, Steven Zwane.

The scheme intends trying to minimise the risk of fraud
by paying the lion’s share of students’ financial support directly to tertiary education institutions and limiting monthly allowances that go directly to students to cover day-to-day needs, such as food.

Zwane concedes the new free higher education policy has significant gaps as it only covers undergraduate study and makes no provision for higher degrees, but regards it a vital step in the right direction.

"This kind of model is a lifeline for people who come from homes where there has never been a graduate and no one has ever worked.

"It is a massive opportunity to take people out of poverty and I wish South Africans would see it like that," he says.

kahnt@businesslive.co.za

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