#FeesMustFall: The true cost of learning

Listen as Terence chats about the cost of learning in the podcast, then read more below:

There has been a lot of talk of free higher education as universities and other tertiary institutions prepare for the start of their year. And our President Jacob Zuma dropped a big bombshell at the end of last year when he said that all lower and middle-income people – the threshold being R350,000 per year household income – will get free higher education.

It was a mad scramble in government after that announcement, with people wondering how we were going to afford that? The NASFAS, which is the National Student Financial Aid Scheme offices, were inundated with applications and chaos ensued.

So I read a very interesting piece this weekend in the Mail and Guardian in which the writer, Mfundza Muller, outlined some myths surrounding free higher education, which many of us would never have thought of. He was actually part of the 20-year review of higher education in 2013 and advised parliamentarians of different funding proposals, and having listened to some of the public debates, thought that there was a lot of misconceptions around what free higher education would mean.

The first one is that spending on higher education is helping the poor. He says it’s not really about that at all and is actually an absurd idea because the majority of students that go to varsity are not the poorest of the poor. In fact, only 5% of South Africans between the ages of 15 and 34 are students in universities, while the majority, 34%, are unemployed. So by saying that you’re going to give everybody free higher education, you’re not really helping poor, unemployed young people because they’re not qualified to go to university and are unemployed.

The second myth is that there are no consequences to increasing borrowing to pay for higher education. The myth is that we can afford it and there is no cost to do it. Of course there’s a cost – somebody is going to have to pay for it! Where is the money going to come from? A number of proposals have been put forward, like taxing the rich and increasing the VAT. But the big problem with this is that when you start to tax the rich in this way, they will find creative ways to dodge these taxes – so a wealth tax to supplement higher education is not going to work. 

Then increasing VAT doesn’t help either. This simply means that everybody pays more – even the poorest of the poor will pay more for things in the shops, so how can that be a good thing?

The third myth is that free higher education will reduce unemployment and will save on future social costs – in other words, we give everybody free higher education, you go to university, get a degree, get a job, and become a contributing member of society - and therefore you will be less reliant on the social grant system and you will start to pay tax.

But if you look at the bigger scheme of things, it’s such a small proportion of people that actually make a significant contribution. If you look at how many people are unemployed in this country or how many actually make it into university you’ll realise the myth. For example, out of the one million children that went to school in grade one, about four hundred thousand don’t even make it to grade 12, so already about 40% or 50% of the system has dropped out and become unemployable young people. And then out of that group that actually passed the matric exams – it was 70% or something last year – a very small proportion of those actually qualify to go to university. It’s a very small, elitist, top slice of young people and you can’t realistically rely on them to prop up the economy. 

So if you were to count all the students at tertiary institutions with free higher education, it would cost around 12 to 15 billion Rand a year. But the reality is that it’s going to cost a lot more than that. If you take into consideration the cohorts running through the system, that is the first, second, and third-year students, the cost will escalate to around 40 billion Rand or more. So perhaps that 12 to 15 billion Rand could be affordable for now, but can we afford it in 2019 and 2020? Probably not.

We really need to have a rational conversation around this whole free higher education issue. In my personal view, we’ve created this obsession with higher education as the be-all and end-all of being a well-rounded, contributing member of society, and diminished all other options. We should start with improving our schooling system so that the kids who come out of school might actually be able to find productive work with just a school leaving certificate.

We have this myopic view that somehow we must all go into these academic institutions after school and that’s the only way. And that’s not true, because the world needs more than just academics.

Do you believe that higher education should be free? 

You can email Terence Pillay at [email protected] or follow him on Twitter: @terencepillay1 and tweet him your thoughts.