Factsheets & Guides

FACTSHEET: Funding & the changing face of SA’s public universities

Researched by Gopolang Makou, Kate Wilkinson & Vinayak Bhardwaj

  1. ENROLMENT

1.1 How many pupils qualify for university study?

Replacing South Africa’s senior certificate in 2008, the national senior certificate now serves as South Africa’s major school-leaving qualification.

Four levels of achievement are possible: a straight national senior certificate pass, or a national senior certificate pass with admission to a higher certificate, diploma or bachelor’s degree. The latter allows a pupil to enrol at a university.

In 2013, over 30% of the 562,115 pupils who wrote the exam achieved a bachelor pass – the highest rate so far.

1.2 How many places are available?

The number of spaces available at public universities is based on projections laid out in the Ministerial Statement on Student Enrolment Planning.

Individual universities consider their infrastructure and resources and provide the department with projected targets, the department’s chief director for university academic planning & management support, Dr Engela van Staden, told Africa Check. Once analysed by the department, the projections become part of the ministerial statement.

For 2017, the planned enrolment is 1,053,420 students, with 220,517 of those expected to be first-time entering undergraduates, Van Staden told Africa Check.

1.3 What is the demographic profile of students?

Historically, higher education opportunities in South Africa were tied to race. This resulted in “low participation rates for black South Africans and more crucially, generally low completion rates among these students”, the Council on Higher Education notes.

Post-apartheid South Africa has, however, seen changes in the higher education landscape. Enrolments of African students in universities increased from 59% of total enrolments in 2000 to 71% in 2015, using figures from the Higher Education Data Analyzer Portal.

  1. SUBSIDIES

2.1 How much funding does government provide to universities?

The share government contributes to public universities and other tertiary education institutions’ income declined from 49% in 2000 to 38% in 2014, according to data from the Centre for Higher Education Trust

While government’s share of income has decreased, economics professor and head of the economics department at the University of the Free State, Philippe Burger, suggests that it is not the only measure that should be looked at.

This is because the percentage (or ratio) of government funding can be lowered or raised when other income streams increase or decrease.

“Focusing on this ratio is not the best way to assess changes in the role of subsidies in funding higher education. Rather, we should ask whether or not the real government subsidy per student has declined,” Burger said.

The “real government subsidy per student” Burger mentions is calculated by dividing government’s subsidy by the number of students. This figure is then adjusted for inflation to enable comparisons between years.

Using this measure, Burger shows that between 2000 and 2004 the subsidy per student decreased by almost 25%.

However, his analysis shows that “since 2005 the real subsidy per student has recovered and has remained relatively stable at roughly R19,000 per student”. (Note: This is in 2010 prices.)

Government’s contribution as a share of public universities’ income decreased by 18.4% from 49% in 2000 to 40% in 2013. However, the “real government subsidy per student”, as calculated by Burger, decreased by 8.3% over the same period.

2.2 How much money does SA provide to public universities as share of GDP?

South Africa’s total public university budget was equal to 0.74% of the country’s gross domestic product in 2015/16, data from the department of higher education and training shows. This excludes the department’s operational costs.

Preliminary estimates show that South Africa’s total public university budget will increase to 0.84% of the country’s gross domestic product in 2016/17. 

  1. STUDENT LOANS

3.1 What is the role of NSFAS?

The National Student Financial Aid Scheme (NSFAS) was established by South African law in 1999. It provides loans and bursaries to students who qualify at all public universities and technical vocational education and training (TVET) colleges.

The bulk of NSFAS funding comes from the department of higher education and training. It also gets money from the repayment of loans by former students as well as government bursaries that are earmarked for specific purposes, such as equipping students with scarce skills.

NSFAS disbursed R9 billion in student financial aid in 2014/15, according to its latest audited financial results, with about half of it allocated as bursaries and the rest issued as convertible loans.

In January, NSFAS announced that the minister of higher education and training have made available funds of approximately R14.6 billion for 2016/7. A large chunk of the funding would assist 71,753 identified students “who qualified for NSFAS funding but were either partially funded or not funded at all over the three past academic years” (2013 to 2015).

3.2. What do NSFAS funds pay for?

A student loan from NSFAS covers tuition fees, residence or private accommodation, food, books and travel costs. This loan must be repaid to NSFAS when the student finishes studying and find employment. If the student excels academically, up to 40% of a NSFAS study loan may be converted into a bursary, which need not be repaid.

Since January 2014, students who qualify can get vouchers through the NSFAS sBux system to use for food, accommodation and travel.

3.3. How are NSFAS loans allocated?

Until 2014, NSFAS used a formula to allocate funds to universities. The formula took into account the number of poor students and the full cost of study as determined by the university. Race was used as a proxy for poor students.

In turn, the universities invited applications for financial aid from eligible, registered students. A 2010 ministerial review commission into NSFAS found that this had advantages in allowing for the offices to be “one stop shops” for all types of financial aid available. However, it also meant that NSFAS could not account for decisions made by university employees. Students also objected that there was little uniformity across institutions.

Starting in August this year, students apply directly to NSFAS online, the scheme’s spokesman, Tsepo Khanye, told Africa Check. Students need to prove that their family earns less than R120,000 per year (R10,000 per month), according to the latest NSFAS annual report.

Still, this leaves out students in the “missing middle”: those who do not meet this threshold but cannot afford university fees. NSFAS considers students from families earning between R121,000 and R400,000 part of the “missing middle”, but in September the minister of higher education undertook to provide support for students from families earning less than R600,000 per year.

So just how many students qualify for university but do not qualify for a NSFAS loan? It is difficult to say. Up to now, this information was mostly held by individual universities and not all of them reported this data officially.

However, the University of Cape Town’s submission to the Fees Commission states that in 2014, close to 54 000 students (or 29%) of eligible students could not be assisted by NSFAS.

3.4. How many students are assisted by NSFAS?

In the 2014/5 year, 186,150 university students received funding of approximately R7 billion. (Note: The rest went to students at TVET colleges.)

3.5. How does NSFAS recover loans?

The NSFAS act requires loans issued to students to be recovered so that these funds can be loaned to new students the following academic year. In January 2016, new rules regarding repayment were announced.

NSFAS starts recovering loans 12 months after students have completed their studies or have dropped out. Repayments are based on the salary that a graduate earns, if higher than R30,000 per year.

A debtor starts paying 3% of their annual salary, rising to 8% when their pay reaches R59,300 or more per year. For example, a beneficiary will pay back R900 a year on a salary of R30,000 a year, or R75 per month.

Interest is capped at 8%, Khanye told Africa Check.

In 2006, when the recovery rate was 35%, NSFAS was able to issue 44,000 new loans out of repayments, research by the department of higher education shows. But in 2014, when the rate dropped to an all-time low of 3.7%, only 7,500 students could be helped in this way.

3.6. Why is the loan recovery rate so low?

The 2010 ministerial review committee “identified a number of practices in NSFAS’s interest calculation and loan recovery processes which are questionable” and which over-inflated what could be recovered from students.

By making its lending policies more compliant with South African credit regulation, the committee suggested that NSFAS’s estimated recovery rate might improve.

Khanye told Africa Check that changes in tax legislation now enable them to track down debtors who got a job but failed to inform them through the South African Revenue Service.

NSFAS is also approaching employers to get assistance in recovering outstanding loans. “However, employers are not under legal obligation to collect debt from their employees on behalf of NSFAS,” he added. – 26/10/2016

 

Additional reading

How much will it cost to go to a South African university in 2016?

Stats SA: Financial statistics of higher education institutions

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