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What you need to know about university fees in South Africa

What you need to know about university fees in South Africa

Students across the country are demanding reduced tertiary institution fees, or even the abolition of fees entirely. In this article GroundUp presents data on issues that are relevant to the debate.

How important is the government contribution to university budgets?

University budgets in South Africa come from three main sources: government, student fees, and private sources (donors, fund-raising etc.). Over the last decade, the government subsidy has decreased as a component of total university income from 49% to 40%, while the contribution from student fees has risen from 24% to 31%.

Composition of University budgets 2000-2012. Source: DHET (2012) Audited financial statements of the universities for the period 2000/01 to 2011/12. Pretoria: DHET.

Composition of University budgets 2000-2012. Source: DHET (2012) Audited financial statements of the universities for the period 2000/01 to 2011/12. Pretoria: DHET.

The overall government contribution is made up of a block grant and an earmarked grant. Universities can spend the block grant largely as they wish, but the earmarked grant is for a number of specific areas of spending, including infrastructure, training, and the National Student Funding Aid Scheme (NSFAS) among others (see here for the latest split).

Over the 2000-2012 period the block grant fell from 88% to 72% of the government’s total contribution, while NSFAS component doubled, from 7% to 14%.

What is the actual value of the government’s contribution to universities?

In 2012/13 the government contributed just over R24bn in total funding to universities (block and earmarked grants). This amounts to 2.3% of total government spending in that year and about 0.76% of GDP. (See National Budget Review.)

To put this into perspective, Roshuma Phungo of the South African Institute of Race Relationswrites that this is low by global standards. “A more appropriate number would be 2.5% of GDP.”

Both the government’s contribution and university enrolments have been growing rapidly. Total enrolment numbers increased from around 600,000 in 2001/2 to 953 000 in 2012/13, and the overall government contribution has grown, in real terms, by about 70% over the same period.

The graph below shows the total government contribution per student, and the total number of students over time.

Total Government Funding per student (Rands) & Total Enrolment 2001-2013. Sources: DHET and CHE data. Notes: Funding is in real 2012 prices.

Total Government Funding per student (Rands) & Total Enrolment 2001-2013. Sources: DHET and CHE data. Notes: Funding is in real 2012 prices.

What this means is that the state contribution has grown with increased student tertiary enrolment. But many institutions started from a low base, and educational inflation, as discussed below, has exceeded the consumer price index. Also, students entering tertiary institutions in recent years are on average a lot poorer than in the early 2000s.

Many have had weak school education, and require extra support at university. It is desirable, too, for universities to improve the quality of education they deliver, and be internationally competitive. This requires more money to be invested.

How much does each university charge?

It is difficult to gather information on university fees given the variation in costs across degree programs. However, StatsSA does collect information on higher education course costs from across the country and publishes this in a ‘tertiary education inflation index’ annually. We show these figures against the regular CPI in the graph below.

Available for the above years from StatsSa. Here is the 2015 publication.

Available for the above years from StatsSa. Here is the 2015 publication.

It is widely acknowledged that university costs are rising too fast. A ministerial committee set up to examine the issue of university funding published their report in 2013, noting that “the current funding framework does not have a way of dealing with higher education inflation, this must be seen as one of the primary weaknesses of the current funding framework”.

The same review committee is clear on the fact that government funding for public universities is too low: “Government should increase spending levels on higher education. It is evident that expenditure on higher education is too low […]. If participation rates of, in particular, African and coloured students need to be improved, more funding will have to be allocated to the public university system.”

Institutions like UCT are under pressure

The following table shows UCT’s council controlled income and expenditure from 2010 to 2014. As can be seen, the institution more or less breaks even year-to-year. (A widely circulated media report has reported UCT as having a surplus of R696 million in 2014, but this includes restricted funds that the university council has no control over, and is consequently misleading in this context.)

UCT income and expenditure 2010 to 2014. Source: UCT annual report 2014.

UCT income and expenditure 2010 to 2014. Source: UCT annual report 2014.

Tight budgets are having direct consequences. For example, due to the worsening exchange rate and the enforcement of taxes on electronic transactions, the library subscriptions budget is expected to be cut by R5 million for next year, and that was in the context of a 10.3% increase in fees.

Can the student demands be met?

The student protest movements are demanding that there be no fee increase. At UCT they are also demanding improved wages for outsourced maintenance and security staff, including that the university should employ these staff directly. The academic staff will also hope for at least inflationary increases in 2016.

For the student demands to be met, for academic staff to get an increase too, and for there to be no serious infrastructural cutbacks at institutions like UCT, the state has to increase its student subsidy.

Roshuma Phungo argues that not only is this possible, but that higher education can be free: “If higher education was to be funded solely through taxpayer subsidies then a further R71bn, over and above the existing R25bn, would be necessary. Our analysis suggests that, with sufficient prioritising, that R71bn could be raised.”

We agree.

GroundUp via Fin24

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  • Archerbald

    I’m not sure I’m entirely convinced by these protests.

    I remember a time when, those who could not afford university, earned bursaries, and worked their asses off for the first five years after graduating to pay off the bursary.

    I remember a time when people took student loans, and worked for the first five years after graduating to pay back the loan.

    These people, today, are leading our industries and corporate powerhouses. Because they learned the lesson the hard way. Because they acquired valuable knowledge, on what one rand means. On what it takes to make one rand.

    Although, the increase is rather high – the problem with the youth of today is that they’d rather buy the BMW their neighbour is driving as soon as their pocket allows them to, instead of paying back what has gotten to the point of their success.

    People are becoming too accustomed to wanting nice shiny things – so much so that they abandon common sense and bring a country to its knees.

    I’m all for protesting and free speech and bla-dee-bla, but there’s a time, a place, and a real cause.

    • RSF

      Could not agree more. Student loans funded my engineering studies and vac/weekend work along with several years of self-imposed austerity helped me pay them back. Vac/weekend work also helped pay for books etc. There was no free ride. No expensive mobile phones. No expensive cars (just an old Beetle!). Very minimal entertainment.

      The biggest issue I have with people wanting something “for free” though is that there are many people that do not appreciate what they get for free. They don’t understand the value. When something is earned through blood, sweat, tears and money, it’s value is much more readily apparent.

      Free tertiary education would also definitely need to come with stricter penalties for failing: e.g. first attempt at a subject is free but fail and you need to pay to return. I’m pretty sure some of my student loans had a penalty for failure associated – more incentive to study and pass!

      Of course, one problem we have is that the government isn’t doing anything to create economic growth to enable job-creation so that students are able to graduate, find a reasonable job and repay student loans. Maybe there’s a need for a model where the loan is interest-free until employed (or a certain age) and then repaid at low interest by salary deductions. It would need careful design and implementation to avoid abuse but it’s one potential solution.

    • Mossel

      And what job do you suggest I get with a matric certificate so that I can get the future value of R50k in five years’ time? For my first year….
      Also, how do you suggest I get a student loan if I have no credit?
      These protest are bigger than fees, the fees is merely the beginning of an emerging educated middle class…and they finally realized that things aren’t as they should be.

      • Archerbald

        Life isn’t fair. Nobody promised you a thing.

        And anyone that did, has you fooled.

        • Mossel

          If more people have access to tertiary education we might have more engineers, doctors and lawyers. You know, those guys that design your bridges, doctor your children and protect your rights. The media only shows the negativity, I was at parliament yesterday and Stellenbosch today. Things are peaceful. Only a handful of narcissistic idiots tend to give everyone else a bad reputation.
          The protesters cleaned up afterward, yet that doesn’t seem newsworthy.

          • Archerbald

            Oh, so more tertiary education, equals more professionals and specialists who protect my rights?

            More professionals? Like journalists?

            The same journalists you claim that are only showing the negativity?

            Way to go trying to prove a point.

          • Mossel

            Yes, yes and yes. They show negativity because it sells, that’s a different story altogether.
            Don’t you see where this could lead?
            By your argument we have enough professionals?

          • Archerbald

            By my argument, these students should learn to fight for basic rights, before they fight for their own comforts and luxuries.

            I will not support a system that will demand me to fund ingrates via my hard earned money. I will consistently find ways to avoid paying tax, because it’s going to finance some little twit who watched too many Lil effing Wayne videos and can’t help but want two bitches on his shoulder as a reward for owning a Ferrari.

            This is the world. Adapt or die.

          • Jeffery Bydawell

            And are the bailouts our tax money is paying for worth it? I think that that money could be better spent. So tell me Archerbald. Would you rather see your tax money helping a failing Eskom/Telkom/SAA? Or do you think that education can strengthen this country? How does reallocating funds affect your pocket? It is not like students are asking for a new tax, only for opportunities. These bursaries you claim we can apply for, where? Have you noticed that fewer bursaries exist now, but many more students are trying to gain access to further education. Some maths for you, enrollment increasing, available bursaries not so much. At the very least, if our politicians where educated, perhaps we would have a better economy and you would not feel this way..

          • Armand van der Walt

            In the end higher education should be free, there is countries that does offer free higher education. But our problem is definitely not at university level, because UNISA is way cheaper than going to classes. But then again not everyone can study by themselves. Anyways our problem is with the basic education provided by our public school system. The curriculum is the problem, we don’t produce students that are good at maths and sciences and that means there is less decent IT professionals, less good engineers, less good doctors and so on and so forth. If there protesters where really interested in changing something they would have been protesting the worsening education in South Africa. That is the only place where real change can be effected

          • Maxill

            You can’t really compare first world countries where tertiary education is free. Its different if your tax rate starts at 30% and only 2% of the population is unemployed

          • Jeffery Bydawell

            Very true. Our education system is appalling! But what these students are protesting is for their future. As children at school, their voices meant nothing and many, many have built up frustrations because of this. I myself was under the blasted OBE curriculum, but thankfully I had parents who saw how worthless this was.. However, many DID go through ruined curricula and are now finally able to be heard. I do not condone violence in the least, but I am all for the betterment of a, shall we say ‘ruined’ generation…

          • Armand van der Walt

            Yes and worst of all, it isn’t even their fault. But we can not lose hope for this beautiful country of ours.

          • Nextlevel

            Thanks for your nostalgia coupled with silly arguments. The fact is that university costs have grown faster than inflation by a wide margin. 2nd fact is there will be less “ingrates” for you to bitch about if the population was educated to a higher level. The sooner this starts the better. Try and stop your selfish reasoning and think about future generations potentially having to deal with the same or worse issues as us now.

      • Maxill

        What do you want to study that costs R50k?
        Why not study at UNISA which is, in my experience, half the price of TUKS?

        • Mossel

          BEng isnt available at Unisa. And that costs R50k.

          • Q Anthonie Burger


            They actually do offer it.
            They also offer BTech Mech Eng.

            A student loan can be obtained with the aid of a family member signing guarentee as my mother did for me. You still have to repay it but should you fail to complete the course at least the bank has a responsible person.
            Studying and working part time is harder yes but I could do it and Im not claiming to be a genius.
            Next excuse?

          • Mossel

            Your link is for University of South Australia… Our UNISA only offers National Diplomas and Btech degrees, there is a big difference between a BEng or BSc(Eng) and a BTech.
            I’m also not making excuses, because I too had a student loan and a bursary. Yes both, because my bursary didn’t pay for accommodation.
            I’m not saying that it cant be done, I’m suggesting that wouldn’t it be better if education was more accessible? Wouldn’t it be better if you didn’t have to work part time just so you can get access to one of your basic rights?

    • Mazi

      That’s what NSFAS is, a loan but government decided to reduce the amount of students receiving these loans. Add the price hike to that and you should understand why they protested.

  • the-TRUTH

    The TRUTH is that the ANC Government has failed to transform and re-structure the education-learning and career development landscape of the country. My View: Going to varsity is no longer a guarantee path to socio-economic empowerment and success. Frankly we need this landscape of socio-economic development to evolve and transform because the global landscape has changed and SA is still trapped in the apartheid socio-economic development framework…

    • Frank

      What exactly is this “apartheid socioeconomic development framework” you refer to? And how would you propose the government “transform” the education-learning and career development landscape of the country? At the end of the day we live in a globally competitive world and South Africa cannot have a “landscape” which is very different from that elsewhere, or we will fall further and further behind. If you want an “African” curriculum, fine, but it will still have to teach students to build bridges, be doctors, lawyers, accountants, and professors on an international level, not some backyard scale, The students all need to be world class in what they do. We have all seen how government hast “transformed” Primary education, hospitals, the police, SAA, the SABC, etc They are all a mess. Please define what your solution entails and if it is any good I will also VoteForChange.

      • the-TRUTH

        Education is no longer just about textbooks and cramming old history books or reading about theories. Education is now about developing analytical critical thinking abilities so that the leaners can use this ability to establish a niche within the socio-econonical political sphere. In others, our kids should be problem solvers, solution driven and innovators or inventors so that the knowledge systems in the country is enriched and is growing

  • P Bouwer

    Thanks for a good informative and unbiased article.

  • Johan Lewis Last

    Roshuma Phungo argues that not only is this possible, but that higher education can be free: “If higher education was to be funded solely through taxpayer subsidies then a further R71bn, over and above the existing R25bn, would be necessary. Our analysis suggests that, with sufficient prioritising, that R71bn could be raised.”

    So if this is done, does that mean that I, as a taxpayer, can go to any university and get a degree for free without be charged for it? Or does this mean only people who don’t pay tax can get a free degree?

    • Mr G

      With our country, probably the latter, or even only the ruling elite.

  • Jon Low

    UCT’s receipts of private gifts and grants has halved between 2010 and 2014. The donors clearly just aren’t answering the call when they expect the university to embrace the ruling regime’s fetish of “transformation”, vile #RhodesMustFall lumpenism and of getting rid of as many white men as possible and replacing them with black women asap even if their CVs aren’t anywhere as impressive as applicants from the forbidden category — pale males.

    UCT has antagonised its alumnae as well as its generous donor/bequest base. And it — and its students — are going to keep on paying the price.

  • david johnson

    My wife and I have worked half our lives to put our son through UNISA. He worked weekends in a bar and was a delivery boy for a fast food outlet in the evenings to help contribute. He never had a cellphone or owned designer jeans. I am therefore certainly not prepared to subsidise people who see fit to produce multiple offspring without any thought of how they are to be educated. One “student” said, “my mothers a cleaner and I have six siblings at home she only earns R2500 how can she be expected to pay”. May I suggest that you demonstrate to your parents and not the government and universities they are the ones who placed you in your present position.

  • Just saying!

    Every student has 12 years in school to prove they are hardworking reliable and capable of excelling in a sertain feild. Surely it is in the best interests of the country and companies to support these candidates who clearly deserve financial support regardless of their background. I have never seen or heard of anyone from any university or company scouting at schools for talent. However this is normal practice in sports. It is clear the entire education system is a total failure. With thousands of physicist’s, docters, engineers now working as technicians , and performing manual labour or low management post. I say every company struggling with human resources deserves what they get. Invest in the future. Invest in the leaders of tomorrow. Beleive in those kids who beleive in the value of hard work and reward them with fanancial support like they reward us with their dedication and hard work.

  • Macafrican

    Free education without targeting will simply lead to doubling the total student population, bigger white elephant universities producing 20% success rate in graduating.

    We need to have 250,000 fewer students wasting their and our money at full time study not passing what was anyway a pointless degree.

    Parttime = R15kpa which is well under half full time cost per year!
    15-20% of students complete their study!

    Make it free:
    For academic year 1 and 2 subjects taken parttime and encourage these kids to take 3 years doing this while working.
    Subjects taken full time to complete the above.

    If you have wealthy parents there is no way ANY money should be wasted for you to mess around for six years trying to complete a 3 year political science and communications degree.

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