How South African universities make their money – grants vs tuition fees

Statistics South Africa has published new data looking at where the country’s higher education institutions get their money from, and how revenue streams have shifted over the past five years.

The stats body’s data shows that government funding of tertiary education has accelerated since 2015, the height of the Fees Must Fall campaign when thousands of students took to campuses across the country to protest rising tuition fees.

The chart below illustrates the amount of revenue that South Africa’s 20 universities and six universities of technology receive from the government in the form of grants versus the amount generated or received from non-grant sources such as tuition fees, donations, interest and dividends.

The chart shows that higher education institutions generate or receive slightly more revenue from student fees, donations and other sources than they do from government grants (the blue line).

In 2019, total revenue amounted to just over R88 billion, with R42 billion from government grants and R46 billion from non-grant funding.

Not to be confused with social grants, government grants are financial transfers from one state institution to another, StatsSA said.  In the case of higher education, state funding is made available via grants from the Department of Higher Education and Training (DHET).

“From 2008 to 2015 the gap between grant and non-grant funding widened as state funding lagged behind,” Stats SA said.

“From 2015, government funding accelerated noticeably. With the slowdown in non-grant funding since 2015, the gap between the two has once again narrowed.”

StatSA said that the slight drop in government funding from 2014 to 2015 was due to the University of the Witwatersrand later reclassifying revenue items in its financial statements.

“A proportional breakdown of the data also reflects the general shift over time,” it said For every R100 of revenue generated or received in 2014 ‒ the year before the Fees Must Fall campaign began:

  • R44 was from government grants;
  • R56 was in the form of non-grant funding, comprising:
    • R34 from tuition fees;
    • R7 from donations;
    • R4 from interest and dividends; and
    • R11 from other receipts.

By 2019, the share from government grants had increased to R48. Tuition fees amounted to just over R21 billion in 2015 (35% of the total), rising to just over R29 billion (33% of the total) in 2019.

The decline in government grants from 44% in 2014 to 41% in 2015 was mostly due to the reclassification of revenue items by the University of the Witwatersrand mentioned above, said StatsSA.

The University of Mpumalanga and Sol Plaatje University depended on government grants the most in 2019. These two institutions are relatively new. Established in 2014, they are still reliant on the government for a large portion of their funding, Stats SA said.

The University of Cape Town, the University of the Witwatersrand (Wits) and Stellenbosch University receive around a third of their revenue from government grants.

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How South African universities make their money – grants vs tuition fees