Financing of Education in South Africa

2015-10-20 08:38

The recent spread of the Fees Must Fall movement from Wits to other universities in South Africa is just but a tip of the iceberg of the problems besetting the South African education sector. Despite receiving around 20% of the National Budget, there is more that needs to be done to transform the structure of the sector.

An analysis of the National Budgets from 2010 to 2015 reveal a steady increase in the allocation to Education. In this period the sector received +/- R100 billion extra in funding from the National Treasury.

Source: National Treasury, Budget Highlights 2010-2015

Higher Education Overhaul

A committee which was set up by the Minister of Higher Education and Training, Blade Nzimande to report to him on the state of funding of Universities and the best way to address the problems in this field unearthed a number of issues. The committee was chaired by the now Deputy President Cyril Ramaphosa and comprised senior and experienced people in the field. The Committee’s report back in 2012 covered a broad vision and work on everything from students to staff, from equipment to buildings. Its recommendations as summarised here included:

• that overall levels of funding need to be increased to come into line with international levels which would, in effect, mean at least a doubling of the block grants allocate to Universities

• that the system should be much more clearly and definitively differentiated, and levels of funding adjusted according to each level’s mission

• that the National Student Financial Aid Scheme was underfunded, and should receive ongoing “steep” increases

Despite these clear recommendations, there does not seem to be much traction from the Ministry of Higher Education and Training in implementing the recommendations. It is informative to go through the SA higher education funding framework  (from page 129) in order to know the thinking behind the allocations of the Education budget. Key features of this framework are affordability, distributive mechanism and cost sharing.

Source: National Treasury, Budget Highlights 2010-2015

A drill down into how the Education budget is split shows some worrying trends, with the allocations to the Tertiary sector being a 7th of the allocation to Basic Education and on a decline in the past few years. The Basic Education sector is bedeviled with its own issues some of which I have proffered some potential interventions to in articles such as Revamping the South African Education Sector, and Education System Overhaul.

The almost treble growth in the allocations to Vocational & Continuing Education Training from 2010 to 2015 are a reflection of the governments drive to ensure alignment with the National Development Plan, as outlined in this response by the Deputy President in Parliament.

National Students Financial Aid Scheme

The National Students Financial Aid Scheme (NSFAS) mission statement is “To be an efficient and effective provider of financial aid to students from poor and working class families in a sustainable manner that promotes access to, and success in, higher and further education and training in pursuit of South Africa’s national and human resource development goals.”

Barry (2015) states that by its own admission, the government’s National Student Financial Aid Scheme (NSFAS) is struggling to collect money owed by its debtors. Since its inception in 1991, NSFAS has disbursed R50 billion in loans and bursaries, assisting 1.5 million students.

Source: NSFAS Annual Reports 2010 to 2015

In the 2014/2015 year alone, NSFAS disbursed R9 billion to university students and technical colleges. Worryingly, annual loan repayments have been steadily decreasing, from R636 million in 2010 to R247.5 million in 2015. “The reality of the matter is that the scheme has become bigger and more complex to administer, and the demand for financial assistance far outstrips the available funds much of which comes from the already strained national fiscus,” NSFAS says in a recent annual report.

“The rise in tuition fees at universities and the decline in subsidies in real terms create all the tension and the scrambling for scarce resources, despite education receiving the lion’s share of our budget.”


The issues being raised by the Wits, UCT, Rhodes students et. al are not new and have already been diagnosed through many research studies, committees etc. Alignment with the recommendations with the Committee came with will go a long way in addressing the concerns which have come to the fore through the recent Fees Must Fall wave.

NSFAS has a mission of promoting access and success in tertiary institutions which is a great mission. Promotion of access is akin to opening the door for someone to enter, but once the person has entered there is need for the person to be able to fulfil the reason why they entered the place (university).

Inasmuch as there is need for students to voice their concerns, they should do so in a manner that doesn’t jeopardise the reason for which they are voicing the concerns- success in the institutions they are in. With exams around the corner students should not take their eyes off the ball.

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