Public funding for Higher Education and the future role of

NSFAS

Public funding for Higher Education and the future role of

NSFAS

Social science that makes a difference

Presentation to the Standing Committee on Appropriations

Vijay Reddy & Angelique WildschutHuman Sciences Research Council

21 October 2014

Social science that makes a difference

Problem statementProblem statement

Education is key for social and economic development. High skills particularly, hold advantages for growing the economy. However, within the SA context, the transformational and developmental potential of HE is equally important. Within such a context the role of NSFAS was to provide greater access to HE to a wider demographic. How can the PSEcontribute towards the economy, poverty reduction and promote inclusive development?

Storyline

In this presentation we will engage on the debates underlying the funding framework for HE in the country together with new evidence from LMIP research to engage with the role of NSFAS

Social science that makes a difference

Mission of post-school education, especially universities

Mission of post-school education, especially universities

• A post matric education is necessary for any individual to acquire the skills and capabilities to participate in the economy and contribute meaningfully as a citizen.

• Post- matric education must be evaluated for private and social returns.

• Post secondary education is for public good and universities have a public mission

• Who should fund university education?• The state has role of funding education and as a

developmental state also has to create opportunities for students from low income households

Social science that makes a difference

Models for funding Higher EducationModels for funding Higher Education

Funding for universities comes from three main sources:•Government subsidies•Tuition fees•3rd stream income

Some principles underlying the Funding framework for HE:•Transformation•Cost-sharing (based on the principle that HE has both public and private benefits). In this regard, the strengthening of NSFAS is needed so that tuition fees should not compromise public and social good purposes •Quality and competitiveness•Responsiveness to social and economic needs•Enhanced co-ordination and collaboration between universities and FET/TVET sector

Social science that makes a difference

Educational level of the population Our aspirational target? 10 million

university graduates by 2030

Educational level of the population Our aspirational target? 10 million

university graduates by 2030

Participation rates in HE by race

SA Participation rate is 17.3%. Target of 25% in 2016

Participation rates in HE by race

SA Participation rate is 17.3%. Target of 25% in 2016

Social science that makes a difference

2011 Picture of the university sector2011 Picture of the university sector

HeadCount 938 000 (2011)

Types of qualification•Undergraduate degrees: 51%; •Undergraduate Certificates and Diplomas: 30%; •Honours: 9%; •Master’s and Doctoral: 7%

Fields of study•Science & Technology: 31%•Business & management: 31%•Human & social science: 41%

Social science that makes a difference

Informing the future role of NSFAS as mechanism

Informing the future role of NSFAS as mechanism

Past•Expand access to HE for the poor and disadvantaged

• Research shows NSFAS to be successful in terms of student graduation, and in comparison to non-NSFAS students

• NSFAS students increasingly obtained degrees rather than diplomas or certificates

•Future• Need to consider academic potential as criterion for

allocating loans, more explicitly• Stricter application of the rules regarding length of

support to students• Credible information system on NSFAS loans and

repayment

Social science that makes a difference

Evidence base towards more effective skills planning

Evidence base towards more effective skills planning

• Degree holders enjoy higher returns to education in the form of higher earnings, followed by certificate holders and then by those with only school-level certification

• Only the possession of an HE degree had a positive and significant impact on economic growth

• Current growth path exacerbates the mismatch in the skills profiles of labour demand and supply and so reinforces inequality

• Shifts away from employment in the primary and secondary sectors and a shift towards employment in the informal economy are critical contextual realities for artisan skills planning in the present and future