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How to fix the fees crisis

Date Released: Sun, 5 November 2017 15:05 +0200

Despite acknowledging the extent of the students’ housing crisis, a fees report is mum on a plan to fix it.

While the crisis is widespread at universities, it is dire at Technical Vocational Education and Training (TVET) colleges where a 2015 survey found only 10 120 beds for 710 000 students, or 1.4% of them.

These figures were presented to the Heher Commission on the feasibility of free higher education.

The commission, chaired by Judge Jonathan Heher, was established by President Jacob Zuma in January 2016. This followed #FeesMustFall protests against planned increases, which shut down several campuses and delayed examinations.

The commission was initially expected to finalise its work within eight months, but this was extended to the end of June this year.

Zuma has had the Heher Commission report since August, but is yet to release it publicly.

The bleak picture painted by the department of higher education in their presentation to the Heher Commission is noted in the latter’s 748-page report.

The City Press has a copy of the report in its possession.

Rising tensions

There have been rising tensions since last week’s City Press revelations on the report’s main finding that free education is not feasible. The report instead proposed that an income contingent loan funding system could instead be a solution.

It would take almost 30 years for the suggested loan funding system to become self-sustainable, but only if government could recover repayments form students.

It’s estimated that R771.5bn is needed to provide infrastructure for higher learning by 2030.

In 2010, the cost of providing the recommended residence spaces over 10 years was estimated at R82.4bn, or R109.6bn over 15 years.

The commission recommended that government form partnerships with other state agencies like the Public Investment Corporation (PIC) and municipalities, private student housing providers, parents and sponsors to determine affordable housing and transport arrangements for students.

Also in the report are parts of a 2010 ministerial task team report into tertiary student housing. This concluded that government was reckless in failing to provide enough accommodation.

“The committee found that throwing open the doors of learning without providing the minimum support required to ensure a reasonable chance of success is not only irresponsible, but also dehumanising, and is negating the very intention of increasing access to higher education,” the report reads.

“Basic health and safety norms are being violated every day by the current poor quality of student housing provision.”

The report, which Zuma has been reluctant to release owing to “ongoing consultations”, also says that on some campuses, student housing management structures and mechanisms have entirely failed. A finger is pointed at Nsfas, which the commission said aggravated the crisis with administrative failures which “imposed severe hardships on precisely those students who are most vulnerable”.

“Poor housing conditions are undoubtedly a factor in students’ poor academic performance and high dropout rates,” it found.

The PIC proposed an option whereby student accommodation be funded through multiple investments, including from the private sector. It said together with development financial institutions, it would then contribute R10bn, backed by a government guarantee to buy the property in 25 years.

The PIC has already invested in 10 000 student beds and wants to increase this to 50 000 by 2020 and 80 000 by 2025.

Meanwhile, the ministerial committee estimated that at least 100 000 student beds were needed immediately at TVET colleges. At least R7.5bn was set aside by Treasury for infrastructure in the 2016/17 and 2018/19 financial years. It is envisaged that half of that money would be invested in student accommodation while the other half would go to other infrastructure needs like maintenance.

But as things stand, the university system has an estimated R25bn in backlogs while accommodation maintenance and refurbishment backlogs stand at R2.5bn. This excludes another R1.9bn needed to modernise existing residences.

But Finance Minister Malusi Gigaba only budgeted R11m for expansions in the next three years.

The commission further recommended that TVET students’ accommodation be considered as much of a priority as it was for universities.

There were fears this week that the commission’s findings could fuel more violent protests. Tensions increased at the University of Cape Town, which has announced an 8% fee hike. Wits University’s Students’ Representative Council decided against disrupting classes as most students chose to rather finish writing exams.

"Wrong approach"

There has been mounting pressure from political parties, students, university management and even Parliament for Zuma to release the report.

This week, Parliament’s portfolio committee on higher education expressed concern about potential consequences of delaying its release and resolved to write to new higher education minister Hlengiwe Mkhize to ask for its release. ANC MPs blocked the DA’s attempts to summons Zuma to release the report.

In a statement on Wednesday, committee chairperson Connie September said that while it accepted that Zuma needed to apply his mind to the report, he must do so expeditiously.

“There now seems to be anxiety and potential unrest as a result of further delays in releasing the report. It serves no purpose in keeping society in suspense over what the commission found. It also is a wrong approach to allow a situation where the report comes in dribs and drabs through unnecessary leaks in the media.”

September said universities needed to know how to budget for next year.

The commission considered other sources of funding, including unclaimed pensions, social impact bonds, and proceeds of corruption and other inefficiencies. Other proposals it received included increasing the skills development levy.

But the most appealing option was dipping into the Unemployment Insurance Fund (UIF), which has net asset funds of R120.12bn managed by the PIC.

“The commission gained a strong impression that while the fund controlled such large resources, it had very little idea of how best to spend the funds.

“It seems clear from the actuarial report that the utilisation of R50bn for the benefit of education would hardly scratch the surface of the fund’s resources,” the report reads.

The report states that it became apparent during testimony by UIF officials that the fund had for many years operated as a money lender, accumulating huge annual surpluses which it reinvested, resulting in greater returns.

The commission strongly recommended that laws be amended to allow surplus UIF funds to be “earmarked for the upgrading of the TVET sector”.

The UIF, however, proposed using only 5% of its portfolio allocated to student accommodation.

Source:City Press