A quiet hunt for education solution continues

While bricks and stun grenades flew this week, the much-derided Fees Commission was quietly bouncing ideas.

Because it was established by President Jacob Zuma, it has been dismissed (and disrupted) by the Fallists as a cynical dodge. But many are engaging seriously with the commission: 179 institutions and individuals have made submissions to date.

Hearings will continue into next year, and the final report is due by June. In its preliminary report, due in November, Judge Jonathan Heher and his panel will seek to chart a temperate path between the hot rage of the Fallists and the cold realities of a paralysed state.

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"The preliminary report won't consist merely of observations," commission spokesman Musa Ndwandwe said. "We have to respond to the urgency of this debate, and we're aware that a lot depends on the recommendations."

The student activists have a potent moral argument that higher education should be free for those who cannot afford it, given the inequities of our past and present.

But the authorities - Higher Education Minister Blade Nzimande, the National Treasury, the vice-chancellors - also have a strong case that university education cannot be free, and certainly not for all students.

The commission has heard a range of measured voices, including some student bodies, that university students in South Africa are a fortunate few, most on course to join the economic elite, and thus should not be privileged over the other 85% of young people who are stuck in shoddy technical and vocational education and training colleges or unemployed.

Most submissions argue that the new system should remain loan-based, although the structure needs to change.

While an income tax hike for the rich was called for by NGO Equal Education and student bodies, this would be a hard sell to a nervy Treasury, given the scale of government waste and risk of speeding disinvestment.

A graduate tax has been floated, but this would risk losses from emigrating graduates, and a flat rate would advantage graduates of more expensive courses.

The University of Johannesburg called for an increase of the state subsidy to 1% of GDP, from 0.71%, to yield R11-billion a year and allow for fee cuts. But it did not suggest what else should be sacrificed to allow this.

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The University of the Witwatersrand argued for new ways to share the load between the state and business. It proposed that the National Student Financial Aid Scheme provide full funding (R110,000-R120,000) to a wide pool of first-year s, with business stepping in with loans from second year .

Wits also proposed that universities team up and issue student debt bonds to private and public investors, and that JSE-listed companies get tax rebates for funding students via a sovereign wealth fund.

NSFAS talked tough about its spiralling bad debt - calling for huge capital injections, but also for stricter selection of students who will complete degrees on time and start repaying loans, and for higher interest rates (currently 80% of the repo rate) .

Under former FirstRand boss Sizwe Nxasana, the scheme is clearly not interested in currying favour with activists.

And the activists? With a couple of exceptions, notably the Students for Law and Social Justice's meticulous analysis of the state's constitutional obligation to deliver higher education, their submissions are badly written, badly researched and riddled with magical thinking.

Spend the Government Employees Pension Fund on students, demanded the South African Students' Congress. Do away with the ministry of sport, said the South African Union of Students. The various Fallist factions have refused even to address the commission.

The students' anger is genuine and justified - the system has let them down. But anger in itself is not an argument.

sub_head_start How the rest of the world does it sub_head_end

Education funding is a sore point in most countries, with student debt crippling millions of Britons and Americans - but some nations are getting it right.

Australia

The country is widely regarded as the world champion of student loan finance. Tuition is fully funded by a universal state loans programme, and unlike in South Africa, graduates only have to begin repaying their debt when they start working.

Repayments are calibrated at a fair proportion to income, and are deducted automatically from salaries.

If you leave Australia, you have to start repaying the loan. By contrast, South African medical graduates, whose studies are heavily subsidised, often leave the country without repaying the state. Dropout is low at 20%, but has risen recently due to higher intakes.

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Brazil

With a similar per capita income and Gini coefficient to South Africa's, Brazil has a proportionally bigger student aid programme, and spends 0.91% of GDP on higher education against South Africa's 0.71%.

Poorer students receive state scholarships, with the amounts varying according to household income, and these can be supplemented with low-interest loans. Loans and scholarships can be used to attend private universities. The dropout rate is about 50% - with weak state schooling a factor.

China

Despite its giant economy, China's per capita income is not much higher than South Africa's. But it has harnessed growth - and propelled it - with the fastest expansion of quality higher education in history.

The formula is a combination of high state investment (3.5% of GDP), high tuition fees, plus large-scale loan systems for poor students. These loans are issued by rural credit co-operatives (through which middle-class investors lend for profit) and the China Development Bank.

The dropout rate is tiny at 3% - partly due to an intense cultural pressure to graduate.

Kenya

The country is undergoing an even faster massification of higher education than South Africa. Public universities are battling to cope, with state subsidies comparable to South Africa's.

However, private universities are mushrooming, and economic growth helps oil the wheels. In post-independence Kenya and several other African countries, universities were free or cheap but enrolment was low, with subsidies thus benefiting the children of the economic elite.

That is now changing, with Kenya spending R1.5-billion a year on loans to poor students, which can also be used at private universities. Dropout rates are lower than South Africa's 85% - 50% at the University of Nairobi.