DUT warns 0% fee increase will push varsity into debt spiral

By Samkelo Mtshali Time of article published Aug 31, 2016

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Durban - The Durban University of Technology (DUT) is not in financial distress, but a 0% increase would push it into a debt spiral in the coming years.

Leading a delegation from the DUT, interim vice-chancellor Dr John Volmink on Tuesday told the Fees Commission that the university would have assumed deficits of R56 million next year, R136m in 2018 and R226m in 2019 should no fee increase be allowed next year.

“It would increase exponentially and that does not include in-sourcing. With in-sourcing, we would not necessarily go with the most inexpensive model, but a model that would buy us the most peace,” he said.

Addressing the commissioners, retired judge Jonathan Heher, advocate Gregory Ally and attorney Thabisile Khumalo, Volmink said the DUT would not in-source contract workers – making them permanent staff – unless other universities followed suit.

Volmink also said the principle of fee-free education was based on social justice and there was a “compelling” transformation rationale for fee-free education.

“We think that education, particularly as a mechanism to emancipate the poor, is critical because a lot has been said about who’s likely to benefit if we make the wrong choices.”

The DUT delegation also said it did not favour fee-free education as a general blanket principle intended to benefit all and sundry, although it stood by its assertions about social justice.

Volmink said they had a formula-based education that took into account the country’s situation and household incomes.

“We support a formula-based notion of fee-free higher education for the poor and indigent. This formula could be extended to accommodate the missing middle.”

Fee-free education, according to DUT, meant the full cost of studying, including registration, tuition, meals, accommodation, books and travel costs.

According to the presentation, the DUT, as a public university was not for generating profit, but was also not for making losses. It also revealed there was still a heavy reliance on the National Student Financial Aid Scheme (NSFAS).

Of the university’s 27 000 students, only 7 122 were funded by NSFAS, meaning a large proportion were self-paying. These students were those classified as the “missing middle”, whose household income was just above the R120 000 mark to qualify for funding.

In a presentation on the state of the country’s 50 Technical Vocational Education and Training (TVET) colleges, the general secretary of the TVET colleges governors council, Xolile Xuma, said these colleges were treated by the president, the Department of Higher Education and the cabinet as an “after-thought”.

Xuma said: “TVET colleges are in crisis because they are underfunded in the sense that we have a mandate of skills and artisan development that we must deliver, but most importantly we have the mandate to play an oversight role in those colleges.”

Professor Irrshad Kaseeram, of the University of Zululand, recommended a model with four components that included fees from households (parents), philanthropic contributions by the private sector and a graduate taxation of 1% for those graduates in the upper income bracket of more than R500 000 a year, who had previously benefited from a fee-free education.

He also suggested a loan scheme that involved the universities issuing bonds underwritten by the government.

“The way it would be paid is that if all graduates who earn in that bracket and pay their 1% tax, we’d get about R10 billion per year in our coffers and that could be used to fund the interest payments for these bonds,” Kaseeram said.

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