The lemon that former president Jacob Zuma handed the country in December in the form of fee-free higher education for poor and working class students could become the gift that keeps on giving.
That is if the increase in funding succeeds in driving the number of undergraduate university students that are supported by the National Student Financial Aid Scheme (Nsfas) from 230 469 in 2017/18 to an estimated 1.2 million over the medium term. At the same time, the number of poor students who will be supported through TVET colleges should increase from 230 068 to 1.1 million.
It goes without saying that these students need to be well prepared for tertiary studies. The Department of Basic Education received no more than an inflation-linked increase.
To achieve its goal of implementing fee-free higher education, the Department of Higher Education and Training received additional funding of R57 billion over the medium term. Together with provisional allocations announced in the 2017 budget, the total additions amount to R67 billion.
“This is the largest spending category with an annual average growth of 13.7%,” finance minister Malusi Gigaba said during the presentation of his budget speech in parliament on Wednesday. The increase in spending will mostly be on additional allocations to Nsfas. Bursary expenditure will rise from R15.4 billion in 2017/18 to R38 billion in 2020/21.
On a year-by-year basis, the allocations for fee-free higher education and training amount to R12.4 billion in 2018/19, R20.3 billion in 2019/20 and R24.3 billion in 2020/21.
This means that all new first-year students with a family income below R350 000 per annum at universities and TVET colleges in the 2018 academic year will be funded for the full cost of study (tuition, books, accommodation and living allowance).
This will be rolled out in subsequent years until all years of study are covered.
Returning Nsfas students at university will have their loans for 2018 onwards converted to a bursary.
“This is an important step in breaking the cycle of poverty and confronting youth unemployment, as labour statistics show that unemployment is lowest for tertiary graduates,” Gigaba added.
These increases come at a considerable cost. To fund the fee-free policy as well as revenue shortfalls, a committee appointed by the president identified budget cuts of about R85 billion over the Medium-Term Expenditure Framework period. Of this, R53 billion was shaved off national government expenditure. This expenditure was largely capital in nature. Another R28 billion was shaved off the grants allocated to provinces and local government.
Large provincial grants such as the school infrastructure backlogs grant, the education infrastructure grant, the human settlements development grant and the provincial roads maintenance grant were reduced. Similar cuts were made to local government grants, including the public transport network grant and the urban settlements development grant.
Read more from the 2018 budget speech