The crisis in NSFAS: A response

11 September 2018

Thank you, Minister Naledi Pandor, for your decisive action and clarification on the state of NSFAS today and your hoped-for improvements in this complex and possibly failing system.

We in the DA have been highly vocal in calling for NSFAS to be revamped and for bringing the attention of the broader public to the plight many students have found themselves in.

For months we have pointed out that tens of thousands of students have remained without the funding recklessly promised to them by President Jacob Zuma at the end of last year, and for months we have seen how NSFAS has proved barely able to respond.

We are particularly concerned about the fact that a lot of the problems seem to have arisen from the mismatch between the systems in NSFAS and those in Universities and Colleges.

This is a hugely frightening bureaucratic mess, which will be extremely complex to undo. It is very similar to the case of the mismanagement of certificates in Colleges – a problem which was similar, and which has taken four years, at least, to begin to solve.

It is our fervent hope that your plans will come to fruition and NSFAS will become the smooth-running machine our students deserve. We will be monitoring it carefully.

However, there is another matter of considerable concern to students, which needs airing. And that is the long-term sustainability of the scheme of fee-free higher education itself.

There is a very grave risk that the students of the future might find themselves with inadequate support even if NSFAS becomes as efficient as Amazon or as smooth running as Alibaba.

The problem is that we are trying to operate the most generous higher education system in the world in one of the most desperate and failing economies in the world.

Our system is the only one in the world which pays for all the costs of all the eligible students. Other fee free systems – such as in Brazil, New Zealand, Germany, Scotland and others – only exempt students from fees themselves.

Here students have their fees, accommodation, food and other expenses fully paid for, with no expectation of having to pay any of it back even if they obtain an extremely well-paying job after their studies.

This means the system is hugely generous and expensive. R58bn has been set aside for it over three years – but our prediction is that this will not be sufficient, as students of all years of study join the system over time.

Paying for multiple years at once will be an entirely different story from paying (or not paying) simply for first-year students.

In six years’ time, the fund will be paying for students in every one of the six years of study it takes to do a medical degree, for example.  And since higher education inflation has been calculated at 8% per annum these ever-increasing costs will be compounded.

We predict that it will be absolutely impossible for the scheme to continue for more than five years, as our economy flounders, without a crisis developing. We cannot afford fee free higher education over time. There must be an alternative and less onerous system.

How will this crisis manifest itself? In two ways: student grants will not be sufficient to cope; and University grants will be cut to pay for the difference.

This is precisely what has happened in New Zealand for example – and that is a country with a strong economy compared to ours. It has also happened in Scotland. And elsewhere.

As the costs of free higher education went up in these places, so the payments to Universities went down. This has meant that the Universities have taken drastic steps to find the alternative funds.

In Scotland, they have admitted increasing numbers of foreign fee-paying students, to the point where non-fee-paying Scottish students cannot find a space. And in New Zealand serious concerns have arisen about the quality and stability of universities.

If the government believed that fee-free higher education would prevent protests in universities, sadly I believe this too is not sustainable.

In fact, the amounts granted by NSFAS are modest and unlikely to increase together with the cost of living over time. I predict further protests, protests to enlarge the scope of the grant.

This discussion relates directly to the discussion this morning: the students’ use of violence on campuses to blackmail universities and the state to concede to their demands.

What we are seeing here is the future elite of our society capturing through violence enormous amounts of funding for themselves, funding which has been paid for by raiding the budgets for the very poorest people – housing and basic education.

NSFAS is struggling to administer a system which cannot be sustained, which was ill thought through, and which was imposed upon us at shockingly short notice by an outgoing president who had overseen the decay of higher education over the period of his tenure and who was desperate for a populist measure to keep up his support.

We need to see a sober evaluation of these facts by NSFAS as well as a rapid improvement in its systems and processes.

It is vital to address the crisis in our higher education system to ensure that higher learning institutions can continue to meet their objective of adequately preparing young South Africans for the job market.

Issued by the DA, 11 September 2018