Students demonstrate against university fee increases in Durban.

Johannesburg - The low funding of universities threatens to derail the objectives of the National Development Plan, which has placed education at the centre of its efforts to tackle unemployment, inequality and poverty and to grow the economy.

This is a warning from an extensive study commissioned by Universities South Africa, formerly known as Higher Education SA, that was released in January this year.

The study notes that the higher education price index was far higher than the country’s general Consumer Price Index, leading to above-inflation fee increases.

As President Jacob Zuma announced there would be no fee increases for universities next year, indications are that the government will be under pressure to increase allocations to universities on the backdrop of successful protests by students against fee increases.

Zuma arrived at the conclusion following a meeting with vice-chancellors and students as they demanded a zero percent increase in fees for 2016, a successful campaign which culminated in a march to the Union Buildings on Friday.

But the zero percent fee increment announced by the president appears to be a temporary solution that could place pressure on Finance Minister Nhlanhla Nene’s Budget next year.

“Given the central place of higher education in the National Development Plan (NDP) to ensure higher levels of employment and economic growth as well as poverty reduction, sufficient financial resources should be provided by the National Treasury to cater for both rapid higher education price and enrolment increases,” notes the study.

It further described the university allocations increase indicated by National Treasury – from R30.448 billion in 2014/2015 to R34.616 billion in 2015/16 – as insufficient.

“In terms of the higher education price index information shown in this study, the increase should have been to R35.186 billion in 2016/2017, constituting a 15.6 percent increase over this period.

“The implication of such lower-than-required provision over the long term would impact negatively on the attainment of a variety of unemployment reduction, poverty reduction, higher GDP growth, stepped-up human capital formation and a larger highly skilled skills pool in South Africa as envisaged by the NDP,” it said.

The study stresses that the continued underfunding of higher education institutions is creating “systemic problems for South Africa as a whole, given the pressing need for mass education to urgently address the NDP’s triple challenge of poverty, inequality and unemployment”.

Another study by a committee appointed by Higher Education Minister Blade Nzimande to look into the funding of universities, concluded in 2013, also recommended much higher increases in funding by the National Students Financial Aid Scheme (NSFAS).

“There needs to be a continuation of the steep increases in NSFAS funding to enable universities to reward deserving students higher allocations more in line with the real costs of study,” it noted.

While an earlier study on the feasibility of free-education, which the Mail & Guardian revealed this week had been withheld from the public by the minister, concluded that free education was feasible, the ministerial committee appeared to disagree with this view.

In fact, it concluded that fees and government subsidies were essential for the income and viability of universities.

“Capping of fees should not be implemented, due to the fact that the quality of higher education would suffer and universities would not be in a position to cross-subsidise other financially needy students through university-funded students bursaries,” it said.

However, the committee favoured a mix of loans and grants to reward performance and high priority to be given to the recovery of NSFAS loans to grow the available pool of funding.

The department on Saturday refuted the Mail & Guardian report, saying the report had never been secret and had been presented to the cabinet, the National Treasury, the ANC NEC subcommittee on health and education and ANC makgotla.

“The non-implementation of the full recommendations is a function of inadequate revenue from the national fiscus,” the department said on Saturday.

The Sunday Independent

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