Do we believe that the purpose of higher education is to provide individual benefits to society by educating some people to such a level that they become knowledgeable, skilled, and cultured global citizens as well as climb to the heights of the middle and upper middle classes? Or do we believe it is to ensure that our society is equipped to survive and thrive in the 21scheduled tribe century, by providing us with the skilled people we need to innovate and the professionals we need to run things?
This question can be easily answered in the case of basic education – schooling is widely accepted as a public good. Most contemporary societies consider it their duty to make it available to all. But higher education has always been treated ambiguously. On one side, people say, “Why should we pay for these pampered, privileged students”, especially when it comes to pursuing degrees that are not considered 'useful'; “They're lucky to be there”. Some people even argue that we should privatize the entire system.
On the other hand, we hear how important university graduates are to the well-being of society. They say that you cannot manage an economy without the innovators, engineers, architects, planners, doctors, accountants and people like them that are required in this day and age. You cannot live in the modern world without the richness of understanding and insight provided to us by artists, historians, musicians, social scientists and writers. The qualities produced by universities are not mere personal luxuries but are for the benefit of society.
Our debates about university funding are mired in these ambiguities. If higher education is a “private good” designed to help the individual advance, then the state should have little to do with its financing. In fact, widespread privatization of higher education appears to be a logical outcome of such thinking. The same has happened in many parts of Africa. In some countries, private universities far outnumber public universities, and in some cases they do a better job than them.
But if higher education is a public good that will benefit everyone, even those who have not obtained university qualifications, then the state should fully fund it. While Europe's welfare states generously fund higher education, many are beginning to incorporate fees into their funding models, and most also run large-scale fund-raising and grant-seeking operations. China and Cuba clearly stick to the public financing model.
But in reality none of these options is completely satisfactory. If there is no significant state funding in the university sector, higher education will become extremely expensive and attract only the smallest elite; And for this, in most (but not all) cases to be powerfully supportive of what he chooses to teach – the most profitable courses being the first ones on the menu. Only the wealthiest private universities – the Harvards of the world – are able to avoid these threats.
In contrast, if universities are entirely funded by the state, especially in developing countries that lack a strong university tradition, as in the Chinese and Cuban examples, they become instruments of state policy and mere producers of skills. It becomes almost impossible for them to develop or maintain any semblance of autonomy, or for them to acquire the richness of offerings that characterize a true university. For example, in more statist systems, history and sociology are considered too dangerous to social order to develop as independent fields of thought.
The public/private goods dichotomy is a serious matter for economists. Very few of them would place higher education firmly in the “public interest” category. The benefits for the individual are enormous, especially in a society like ours, where only 5% of the population ever makes it to university.
The Finance and Fiscal Commission, whose job is to advise the Treasury on spending priorities, has stated several times that it views higher education as neither just one nor the other, but a combination of both. Thus emerged the model of “shared funding” used by the South African state to support universities – both the state and students must contribute to the cost of running them.
And over time something like a social contract has emerged to underpin this approach. By the 1990s the state contribution had become almost 50% of the total cost of running the system; While student fees had stagnated at around 20%, an increasing proportion of these fees were being supported through grants to students through the NSFAS system. (The remaining amount is due to grants, contracts and donations)
Today we see that this social contract has been broken. The state's contribution to the total cost has declined drastically, and now contributes only 40%. On the other hand, the proportion of contribution by fees has increased from 20% to 30%. (The remaining portion comes from grants, donations etc.). This has placed unbearable pressure on the private individual, just at a time when the economy has stagnated. It is not surprising that social protests have erupted as a result.
However, while calling for no fees, the protesters remain firm that higher education should be treated solely as a public interest. But its risks are very high. It is estimated that the introduction of completely free universities would cost taxpayers an additional R60bn per year.
The taxpayer may revolt at the heavy burden placed on him, as it is clear that the graduate benefits personally from a university education. Furthermore, if we move towards a full “public good” model in South Africa, where university autonomy is already untenable, the state's ability to control our universities would be hugely boosted.
It would be wise to stick to the “shared” funding model. Increasing the state contribution to reach the original 50% level, ensuring that fees do not rise excessively, and reforming NSFAS to ensure that a wider range and number of students are supported are all possible options.
Belinda Bozzoli is the DA Shadow Minister for Higher Education and Training.