President Jacob Zuma File picture: Nic Bothma/EPA

Parliament - President Jacob Zuma on Tuesday released the findings of the Heher commission, which investigated the possibility of providing free higher education in South Africa.

In the report, the commission has recommended that all undergraduate and post-graduate students be funded through a cost-sharing model of government guaranteed Income-Contingency Loans sourced from commercial banks.

"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 report says.

"In implementing this model, the Commission recommends that the existing NSFAS model be replaced by a new Income Contingency Loan System."

The report highlights the key points of the ICL model as follows:

* 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).

Violent student protests over free higher education brought the country to a standstill in 2015. The protests which named #FeesMustFall started following universities announcing increases on fees. Zuma appointed a commission of inquiry to investigate its feasibility last year.

The commission, chaired by Judge Arthur Heher, handed its report to Zuma in August.