Fee-Free Higher Education and Training in South Africa
President Jacob Zuma has released the fees commission report into the Feasibility of Fee-Free Higher Education and Training in South Africa. Zuma established the Heher Commission in January 2016 to investigate university fees.
The terms of reference ion was to enquire into making findings, report on and make recommendations on the feasibility of making higher education and training (higher education) fee-free in South Africa, having regard to:
– The Constitution of the Republic of South Africa, all relevant higher and basic education legislation, all findings and recommendations of the various presidential and ministerial task teams as well as all relevant educational policies, reports and guidelines;
– The multiple facets of financial sustainability, analysing and assessing the role of government together with its agencies, students, institutions, business sector and employers in funding higher education and training; and
– The institutional independence and autonomy which should occur visà- vis the financial funding model.
The Commission was expected to complete its work within eight months and submit the final report to the President within two months of completion.
At the request of the Commission the working period was extended until 30 June 2017 with the report due within two months of completion of the work. The final report from the Commission was received on the 30 August 2017.
The recommendations of the Commission can be summarised as follows:
- The Commission recommended that government increase its expenditure on higher education and training to at least 1% of the GDP
- Increasing student accommodation
- Online and Blended Learning Government must further investigate the viability of “online and blended learning” as an alternative in addressing the funding and capacity challenges facing the current higher education and training sector.
- That all students at TVET Colleges should receive fully subsidized free education in the form of grants that cover their full cost of study and that no student should be partially funded.
- Postgraduate students – The Commission recommended that the NRF bursaries for postgraduate students be retained and expanded when possible.
- Historic Debt – It is recommended that students with debt, who have since graduated, be offered income-contingent loans (ICL) as well.
- NSFAS – The Commission recommend that the participation of the National Student Financial Aid Scheme in the funding of university students be replaced by the ICL system. NSFAS should be retained for the provision of the funding of all TVET students and TVET student support if such retention is considered necessary.
- Funding for University students –
The Commission recommends that all undergraduate and postgraduate students studying at both public and private universities and colleges, regardless of their family background, be funded through a cost-sharing model of government guaranteed Income-Contingency Loans sourced from commercial banks.
Through this cost-sharing model, the Commission recommends that commercial banks issue government guaranteed loans to the students that are payable by the student upon graduation and attainment of a specific income threshold. Should the student fail to reach the required income threshold, government bares the secondary liability.
The Commission further recommended a university fee capping mechanism to avoid the cancelling out effect.
Some key points of the ICL model are the following:
- Repayment only begins when the student reaches a certain threshold income;
- Payments only continue until such a time as the loan is paid off;
- The repayment period could be set to a maximum period so as ensure that payment does not impact on retirement accumulation;
- Students could be allowed to settle the loan more quickly should they be able to;
- Those who emigrate could be required to pay off the loan before leaving;
- Loan is made available to all students ( Private and Public Universities) ;
- No means test
- The financing of every university student is achieved through a bank loan at a rate favourable to the student. Whether such financing should extend to the full cost of education will depend solely on the choice of the borrower and his need for such an extension;
- Collection and recovery of the loan will be undertaken by SARS through its normal processes.
- The state can guarantee the loan or, better still, purchase the loan, so that the student becomes a debtor in its books. Prof Fioramonti, in his model proposed the inclusion of the banks as lenders to students, with a government guarantee, so as to cover the cost for the initial years.
- No student is obliged to repay a loan unless and until his or her income reaches a specified level. At the lowest specified level the interest rate is at its lowest but will increase in accordance with specified increases in income growth.
- If the loan is not repaid within a specified number of years the balance can be written off.
- The State will repay each student loan to the bank at a given date (say five years from the first advance).
The Commission recommended for the application and registration fees to be scrapped across the board.