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“Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone else” (Bastiat, 1848).
Free Higher, education is a vexed issue in South Africa. The discussion about of higher education began through October 2015, whereby South African students led a nationwide protest movement called #FessMustFall. This protest movement was a response to tuition fee increases of several public universities (Badat 2016), the protests started at the University of The Witwatersrand and later gaining momentum spread to several other public universities.
After these protest includes an announcement in 2016 by former minister of Higher Education Dr Blade Nzimande, who stated that fee increase will be capped at 8% (Kgale,2018) , there will be an implementation of a new funding policy to support nearly half a million students ( EWN,2017) and adding an additional seven billion in grant funding for the 2016 academic year.
In this essay the implications and outcomes of the #FeesmustFall demands for free higher education will be discussed, such as the sustainability of Government Funding for high education and how it may be beneficial for social-political development but not the socio-economic climate.
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The concept of free education is in line with the ideas of the constitution (Kgale, 2018) but it is not beneficial for the economy as it is not financially viable for the government, institutions themselves and the future of socio-economic development.
In terms of economic viability of free higher education, the government have been provisions that require large dependency on the state. Over the medium-term (1-5 years) the government will spend a total of R111,2 Billion to fund the education of approximately fund 2,8 Billion students who are from poor and working-class families for higher education institutions (SANews, 2019).
In the 2019/20 financial fiscal year the government allocated R33.3 Billion to the National Student Financial Aid Scheme (NSFAS) and in the 2021/22 financial year the government is expected to spend R40 Billion (SANews, 2019) for student funding.
This enormous budget allocated just for Free Education take up priorities, of other important state-funded sectors such as health, basic education, national security and infrastructure (Colete, 2008) department cuts and budget cuts, must be made to ensure there is enough funds in this sector. The funding of this budget is also supported by variations of adjustments set up by government such hiking up taxes (using taxpayer revenue to make up for shortfalls in budgets which have increased significantly since 1994 (Colete, 2008). ) like increasing personal income tax, cooperate tax and Value Added Tax (Business Tech 2017). This method of acquiring revenue disproportionally benefits the affluent at the expense of the disadvantaged (HESA, 2008) as middle to high income groups do not contribute a large percentage of their annual income to taxes in comparison to the poor. A current example is the VAT increase from 14% to 15% on 1 April 2018, the socio-economic groups that receive ‘free’ education are technically contributing to the scheme and paying for it with money they already do not have although, social grants did increase by an average of 4,8% which is just R80 (SANews). Theoretically, the increase in social grants is not enough to ‘stimulate’ back into the economy through spending as a means of financing other important sectors of governance. It creates insufficiency and a larger dependency on state funding for free higher education alone. This is also worsened by lack of trade and privatization of State-owned entities which makes difficult to fund this Sector (Johnstone, 2004:65) with funds that stem from consumer spending than government economic activity.
As stated above government funds are available for a small percentage of students, although these funds are limited in their use to the institutions themselves. Tuition fees were the most significant source of non-governmental revenue (Van Heerden et al 2007), government’s limited spending on public universities, lead universities to generate insignificant revenue (Ouma 2007:914) and therefore tuition fees rise as a way to obtain a constant flow of resources, upkeep of institutional stands, infrastructure, etc. #FeesMustFall may be referred to as an ‘Organic Crisis’ (Badat, 2016:2) ,a movement that displayed the true colours of an already broken higher education system, spoilt capitalistic democracy and an eroding society that may be worsened by a policy that makes education free for some but not fair to most in the long run.
The economic sustainability of free higher education is questionable due to how expensive it is. South Africa is so politically and socially unpredictable, but the participation of the disadvantaged in free education does indeed have its social benefits for the socio-political climate. Access to free higher education will bridge the inefficiency gaps, in the labour market by injecting more skilled and educated workers in the market.
According to the Poverty trends report for 2006 to 2015 nearly 30.4 million people in south Africa are impoverished, that is 55,5% of the population (StatsSA 2016). The free education policy will aid in closing in the gap between the rich and the poor, by giving access to students who would previously not have had the opportunity to further their education due to financial constraints. This may decrease high crime rates, as youth unemployment is currently 55,2% and the unemployment rate is lowest amongst graduates at 31,0% (Quarter labour force survey, 2019) this may improve the GDP rates as well as the overall standard of living for all. #FeesMustFall was described by Badat as an, ‘Organic Crisis’ which is resolved through social revolution, formation action from motives to resolve and restructure social injustices (Saul and Celeb 1986:57). The outcomes of the protest called for a need to rectify History. Most of the South African population is made up people of Africans which is 79,2% of the population and 64,2% of Black Africans live below the poverty line. (Brands South Africa, n.d.). Whereby most blacks are currently economically disadvantage due to the legacy of Apartheid and only 1% of White South Africans are impoverished (Wilkinson 2018). These figures show the necessity for free education to impower the historically disadvantaged majority and maintain a peaceful democratic society, that is aware of the consequences history had on its people and aid a broken education system.
Correcting the history of systematic racism in South Africa, may not be effective just by the implementation of an education policy that is not sustainable for the average taxpayer. The Government may need to look at effective sustainable methods of funding free Higher education. Such as diversifying sources of revenue may guarantee universities’ financial stability (Pfeffer and Salancik 1978) like the cost-sharing model and the redistributive tuition model. The ‘Missing Middle’ students are the biggest challenge facing government in the implementation of fee-free education as they do not fit into the then (2015) NSFAS threshold of R122 000 per annuum but are below the threshold of commercial loans. Historically Black Universities experience the worst backlog when it comes to receiving funding and adequate resources from the state, which makes one question the effectiveness of government spending for the institutions themselves outside of the interests of black students. In terms of government spending, the massive budget of R111.2Billion may not be attainable due, to governments history of mismanagement and abusing state funds up to R1,8 trillion, a third of South Africa’s R4.9-trillion Gross Domestic Product such as under the former President Jacob Zuma administration (BusinessTech 2019) makes one, question the longevity of state funds and whether or not our Financial management will be able to continuously deliver and maintain the funding for Free Education.
Economic sustainability of higher education is irresolute and should be analyzed and re-introduced in a manner whereby government will be able to contribute for all students as there may be some challenges in terms of acquiring for funds to increase state budget for Higher Education until then, Free Education should remain a concept until reintroduced as a concise plan by Government to protect the disadvantage and boost economic activity.
The Complexities of Free Education. (2021, Feb 03). Retrieved from https://studymoose.com/the-complexities-of-free-education-essay
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