Commission recommends that students should pay for fees when they work.
THE report on the feasibility of free education in the country has found that the state does not have the capacity to provide such but other methods could mitigate the situation.
The report which was released by President Jacob Zuma recommended that students be given loans which they would only pay back when they started working and met a certain income threshold.
“The Commission recommends that all undergraduate and postgraduate students studying at both public and private universities and colleges, regardless of their family background, be funded through a cost-sharing model of government guaranteed Income-Contingency Loans sourced from commercial banks.
“Through this cost-sharing model, the Commission recommends that commercial banks issue government-guaranteed loans to the students that are payable by the student upon graduation and attainment of a specific income threshold.
“Should the student fail to reach the required income threshold, government bears the secondary liability,” the report said.
The Heher report further suggested that in implementing this model, the existing NSFAS model be replaced by a new Income Contingency Loan System. Zuma established the Heher Commission in January 2016 to investigate university fees.
“This was on the footsteps of nationwide university shutdowns as students called for free decolonised education in the country.
It was chaired by Justice Jonathan Arthur Heher, assisted by Adv Gregory Ally and Leah Thabisile Khumalo.
The commission also recommended that government considers the introduction of a university fee capping mechanism to avoid the cancelling out effect.
Some key points of the ICL model are the following:
- repayment only begins when the student reaches a certain threshold income;
- payments only continue until such a time as the loan is paid off;
- the repayment period could be set to a maximum period so as ensure that payment does not impact on retirement accumulation;
- students could be allowed to settle the loan more quickly should they be able to;
- those who emigrate could be required to pay off the loan before leaving;
- loan is made available to all students ( Private and Public Universities) ;
- No means test;
- The financing of every university student is achieved through a bank loan at a rate favourable to the student. Whether such financing should extend to the full cost of education will depend solely on the choice of the borrower and his need for such an extension;
- Collection and recovery of the loan will be undertaken by SARS through its normal processes.
- The state can guarantee the loan or, better still, purchase the loan, so that the student becomes a debtor in its books. Prof Fioramonti, in his model, proposed the inclusion of the banks as lenders to students, with a government guarantee, so as to cover the cost for the initial years.
- No student is obliged to repay a loan unless and until his or her income reaches a specified level. At the lowest specified level, the interest rate is at its lowest but will increase in accordance with specified increases in income growth.
- If the loan is not repaid within a specified number of years the balance can be written off.
- The State will repay each student loan to the bank at a given date (say five years from the first advance).
The Commission further recommended that government increase Block funding to the Post School Education and Training Sector (PSET) as a whole in line with increased costs for providing quality education and infrastructure needs.
“The Commission recommended that government increase its expenditure on higher education and training to at least 1% of the GDP, in line with comparable economies.
“The Commission further recommended that government pay particular attention to the Technical and Vocational Education and Training colleges as they cannot perform at their current funding levels,” the report said.
It added that all students at TVET Colleges should receive fully subsidized free education in the form of grants that cover their full cost of study and that no student should be partially funded.
“The Commission recommended that the participation of the National Student Financial Aid Scheme (NSFAS) in the funding of university students be replaced by the ICL system. NSFAS should be retained for the provision of the funding of all TVET students and TVET student support if such retention is considered necessary.
“The Commission recommended for the application and registration fees to be scrapped across the board.”
The report also found that there is a severe shortage of student accommodation across the higher education and training sector. The Commission recommended that government adopt an affordable plan to develop more student accommodation and that Historically Disadvantaged Institutions be prioritised.
“The commission further recommends a Public-Private Partnership approach when responding to the student accommodation challenge,” said the report.
Political parties had mixed reactions to the recommendations. The Economic Freedom Fighters rejected the proposal of only making TVET colleges free. Spokesperson Mbuyiseni Ndlozi said the Commission seemed to suggest that those who attended universities could afford higher education, while those who attended Technical and Vocational Education and Training (TVET) colleges were in the main poor.
“It proposes an income contingent loan for those who cannot afford within universities, in particular, the missing middle. However, we know that already South Africans are over-indebted, thus young people will simply transition from youth to adulthood in indebtedness. The Commission is, therefore, asking the country to simply position the responsibility on future taxpayers and it is not sustainable,” said Ndlozi.
The ANC also raised concerns with it. Secretary-General Gwede Mantashe said whilst they welcomed the release of the report, there were a number of areas which were of concern to the party.
“The report misses some key tenants of the progressive agenda we seek to drive. Free education for the poor and the working class is not under discussion, it is a policy position of the ANC.
“What the ANC expects rather is a discussion on the modalities to implement it.
“The ANC calls on the government to reject the proposal for a cost-sharing model which will further indebt students and the different classification of students.
“The ANC will further study the comprehensive report and engage government on how practically and urgently we advance the attainment of fee-free higher education for the working class and the poor,” he said.