SOUTH AFRICA: Universities warn against fee-capping

If the South African Government decides to cap student fees, it will undermine university autonomy and income as well as quality and research, the nation's vice-chancellors warned in a hard-hitting report published last week. Fee-capping will also have the unintended consequence of making higher education cheaper for the wealthy while not improving access for poor students or easing the financial burden they bear – a problem that sparks perennial protests on campuses.

The report, by a task team from the vice-chancellors' association, Higher Education South Africa, was prompted by concerns expressed by Education Minister Naledi Pandor about soaring tuition fees, as well as measures being considered by the national Department of Education to control fees. The government's main worry is that fees have risen at a higher rate than state contributions to the National Student Financial Aid Scheme.

The report – Tuition Fees: Higher Education Institutions in South Africa – argues that since higher education is both a public good and a private benefit, the cost should be shared between the state and individuals. The trick is to ensure an appropriate balance between the public and private costs and benefits of investment – in ways appropriate to national socio-economic circumstances, skills imperatives and policy goals.

Prepared by a team chaired by Professor Rolf Stumpf, vice-chancellor of Nelson Mandela Metropolitan University, the report identifies four major constraints regarding higher education funding: a long decline in state funding and accompanying increases in tuition fees, inadequate funding for the student financial aid scheme, the need to curtail mounting student debt, and lack of a fee model appropriate to a country with vast disparities in income and participation in higher education.

It says public funding for universities dropped as their need grew for financial support to achieve policy goals, including more equitable student access, improved quality and student success rates, and greater responsiveness to social and economic needs. From 2000 to 2004 state allocations to higher education declined in real terms by 3% while fee income per full-time student grew by almost 5% a year although, as a percentage of GDP, public funding of universities fell from 0.82% in 1996 to a low of 0.67% a decade later.

This, the report says, forced universities to generate income through tuition fees, research, donations and investments. In the five years to 2004, fees rose from an average of 24% to 29% of total university income while state funding dropped from 49% to 43% of income and the proportion of other income rose slightly. Also, above-inflation fee hikes meant that, despite regular boosts in funding to the NFSAS and greater loan recovery from graduates, by 2004 the scheme's funds covered only 17% of total fees charged, stifling efforts to improve access for poor students.

Meanwhile, public pressure over fees has been simmering. Student unions have stridently advocated free public higher education and, along with parents and the government, have become increasingly concerned about the costs of higher education. Fee increases also put pressure on the state to increase funding for the NSFAS – and drive up the huge debt burden borne by both universities and students.

While no formal policy position yet exists, the report says the main trajectory of thinking in government seems to be that caps should be placed on total fees raised by universities – on condition the government provides new money to make up for lost institutional income.

The vice-chancellors' report raises a number of serious concerns:

Ministerial regulation of fee income will perpetuate a trend of centralising control of higher education and will negatively impact on the autonomy and flexibility of higher education.
Given current funding constraints, fee capping would lead to more students but lower revenue which would undermine quality and the academic support services needed most by disadvantaged students. This, in turn, could lead to higher drop-out rates.

Capping tuition fees will discourage institutional differentiation and will actively advance institutional homogenisation. There is no provision in government thinking for differences between, for instance, teaching versus research universities.

Universities are very different in terms of the proportions of income derived from fees or state funding, with some depending on state allocations for more than 80% of their income and others for less than 50%. Several leading universities will see income drastically cut.

The report states that fee-capping will jeopardise universities' research missions: "Institutions will be starved of resources to conduct research, which will lead to a loss of highly-valued researchers and diminished research output."

Most importantly, the vice-chancellors believe fee-capping will have unintended consequences: "Capping tuition fees will not necessarily improve access for the poor; instead, it will result in making higher education cheaper for the rich."

Many intellectually talented but poor students who qualify for student aid fail to secure support because of the scheme's inadequate resources. This is a major issue, the report states, limiting access for poor students and forcing many universities to support needy students – an alternative bursary source that would be compromised by loss of fee income.

Among its four main recommendations, the report says system-wide tuition fee regulation should not be implemented although universities should provide comprehensive information to students and their families on the costs of studying and opportunities for financial aid, to help them plan how to finance higher education.

It says universities should move towards a single and inclusive fee that covers tuition and associated services, to help control and reduce these costs. Universities should "therefore continue to set their own fees but should adhere to common standards of transparency".

Finally, the report calls for the NSFAS to be boosted to become a robust and better-funded public scheme – as the key alternative to ministerial capping of fee income – and for urgent high-level engagement between vice-chancellors and the education ministry and department.

Full task team report on the HESA site