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Gordhan commits extra R16bn to universities

The South African Treasury has committed an additional R16 billion (US$1.15bn) to South Africa's higher education system over the next three years.

A total of R8bn will be allocated to universities to subsidise fee increases for students whose families earn less than R600,000 per year, finance minister Pravin Gordhan said on 26 October.

However, Gordhan did not say whether the government was planning to give in to protesting students’ demand for free higher education in his 2016 medium-term budget speech in Cape Town.

The R8bn fee subsidy makes good on promises by higher education Blade Nzimande in September to protect students from low-income backgrounds from fee increases in 2017. The promise came after Nzimande recommended that universities cap fee increases at 8 per cent.

The remaining R8bn announced by Gordhan will be allocated to the National Student Financial Aid Scheme, which Gordhan said amounts to an 18 per cent increase in the scheme’s annual budget.

Gordhan said higher education is the government’s second fastest growing budget line. This illustrates the government’s commitment to quality education, he says. However, he admitted there was a problem with meeting demand.

“At the heart of the issue is that access has expanded faster than resources. As a result, many students face financial hardships that undermine their ability to succeed academically,” he said.

As protestors and police clashed outside Parliament where he spoke, Gordhan called for an end to campus shutdowns. “We do not want them to lose the 2016 academic year. We want the violence to stop,” he said.

He added that the Treasury would work with corporations and financial institutions to expand bursaries, loans and work opportunities for students.

Gordhan’s knot?

Gordhan’s announcement came a day after Statistics South Africa released data showing that fees contribute 34 per cent of the income of the tertiary education system. Government grants represents 43 per cent, and donations and other forms of income make up the rest.

However, some universities rely more on fees than others. Most universities get roughly a third of their income from fees. This includes all the major research universities in the country. But the University of South Africa relies on fees for half its income. It is also the cheapest university to go to in South Africa.

These figures show the funding gap that would be left were universities to offer tuition-free education, the report states. “If tuition fees are ever done away with completely, both government and higher education institutions will have the difficult task of finding another way to finance this amount.”

Meanwhile, there is continued unrest on campuses. Most universities hope to be able to complete the academic year, albeit under a heavy security presence.

The National Research Foundation earlier admitted to a parliamentary committee that it has started drawing up contingency plans for its funded students and research programmes, should the academic year be cancelled due to protest.