Investing in education a good strategy
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If the bar is set high, investing in education is just smart economics, writes Totsie Memela.
The recent troubles at the University of KwaZulu-Natal (UKZN) placed the issue of student finance back on the agenda. Students vandalised the institution and set cars alight after regulations were changed for accessing funding.
The institution was asking those who qualified for financial aid to improve their performance, by meeting higher standards so as to raise the academic bar. This was subsequently followed by calls by Higher Education Minister Blade Nzimande for a re-think of our tertiary education system that would allow for free higher education for the poor.
The scenes at UKZN were reminiscent of those early last year when desperate applicants went on a rampage at institutions across the country after being turned away.
The reality is that the National Student Financial Aid Scheme (NSFAS) will continue to fall short of demand with most universities saying the need for access exceeds available spaces by 10 to one.
This year the government spent R9.5 billion on loans and bursaries, with the head of NSFAS saying estimated funding required over the next three years could total R51bn, which is based on our economic situation and the number of job losses could increase.
As world leaders meet at the UN to discuss targets for the reduction of poverty, hunger, violence and inequality by 2030, Danish economists’ think-tank The Copenhagen Consensus group released its finding that free education for all is just not financially feasible anymore.
Instead, they argue that increasing pre-school enrolment in sub-Saharan Africa from the present 18% to 59% would “return $33 for every dollar spent”.
Therein, in my opinion, lies the problem. We have constant challenges in education finance because of the mixed messages that unfortunately get communicated in the political space. As a government and a country, we keep preaching and encouraging a culture of entitlement without driving the message that rights come with huge responsibility and accountability.
Students have an obligation to not only attend lectures and take advantage of all the support provided by their institutions, but also to pass and to pay back to society – either through paying back their student loans, enhancing the quality of life for their families or making the most of their education by reaching the pinnacle in their chosen profession.
Those are the obligations we need to take on board when we have that dialogue on education. We need to develop a “pay it forward” mentality. For example, South Africans must know that if they do not pay back student loans, they are robbing another child of that opportunity.
In the same vein, if you burn your institution down to the ground, then where are you going to attend lectures tomorrow? Student activism has long been a part of our historical march to democracy and the fires within the bellies of our youth must never die.
However, you cannot call yourself political when all you do is rob yourself and future generations of an education.
Education is a complex battlefield. And free education may be up for discussion now, but it is literally years away, if at all, from becoming official policy. The question we need to ask ourselves as leaders, students, corporates and government is: What are we doing now to invest in education not only at tertiary level but from the foundation phase because this will create greater opportunities for success at higher levels?
A January 2015 Unicef report states that investing in education makes economic sense. It also reveals that each additional year of education boosts a person’s income by 10% and increases a country’s GDP by 18%.
The fact that education equals smart economics – and smarter economies – is not a new concept. South Africa invests billions in higher education and rightly so. Such investments are crucial to the intellectual and economic growth of any society.
Such investment has even greater resonance to us, given our divided past and the current widening chasm between the haves and the have-nots.
Eduloan, the country’s only private education finance specialist, has recognised the need to invest and unlock potential.
We do not just assist students to enter university by providing loans, but also help them budget effectively through our funds administration system that ensures that money goes towards what it is intended for.
Thanks to our partnership with one of our major shareholders, the Public Investment Corporation (PIC), we have an opportunity to, in future, provide support and assist 4 million public servants in upskilling themselves given the changing dynamics of our society. This is indeed smart economics.
We will also be able to assist them access affordable loans to send their children to pre-school, school and university. This is smart economics.
The provision of accessible, affordable and manageable finance is crucial if we hope to meet our educational needs and objectives as outlined in the National Development Plan by 2030.
In addition, given our current slow national growth rate, coupled with the slowdown in the global economy, the only way we can grow as a country is through investing in the future and investing in education.
A Unesco report from 2013 supports this notion. It states that developmental states like South Africa can and should use the global economic slowdown to build their human capital which, in turn, will boost the national competitiveness required to deliver wealth and national prosperity.
We have seen how countries such as Japan and Germany extricated themselves from the chaos of the World Wars in the early 1900s to rebuild their countries and economies through smart investments in education.
They unlocked the potential that existed and touched lives. Education finance is a complex and emotional subject. But the solution is not to destroy or give up hope, but come up with workable solutions that build a country and economy for the benefit of us all.
It requires a broad strategy and realignment in thinking from all education stakeholders, students, financial institutions, government and corporates genuinely looking to improve the lives of their employees and broader community – affordably.
And if the bar is set high – as they are doing at UKZN – then it is what it is and the right thing to do. It is all, really, smart economics.
*Memela is the chief executive officer of Eduloan.
** The views expressed here are not necessarily those of Independent Media.
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