Budget 2023
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No to free education but tuition fees could be funded - economist

Johannesburg – Government’s contribution to fund higher education has been declining, leading to a rise in student fees. However, tuition can be funded, according to Investment Solutions chief economist Lesiba Mothata.

In a telephonic interview with Fin24, Mothata explained that although tertiary education cannot be completely free, government and business can pull together to fund tuition fees.

“Contributing tuition funding to families which are struggling can be done,” said Mothata. Capital directed to the Brics bank could be repurposed to fund higher education, he explained.

Funding tertiary education will not be a “quick win”, but it is possible.

READ: Two options for funding higher education in SA

According to a report by Momentum Investments (MMI) on the outlook for the mini budget, contingency reserves are likely to be drawn on for shocks such as tertiary fees. The outlook for these reserves indicates R6bn may be available for the financial year 2016/17, while R10bn will be available in the financial year 2017/18 and R15bn in the following year.

The decline in government’s ability to fund public higher education has followed slowing gross domestic product growth, stated the MMI report.

ALSO READ: Free higher education? Why it’s not possible in SA

In the national budget in February, government reprioritised R16.3bn for higher education. Over the medium term, R5.7bn was set aside to compensate universities for a fee freeze in 2016, R2.5bn was set aside to clear outstanding student debt and R8.1bn was set aside to provide additional funding to underfunded students.

Higher Education Minister Blade Nzimande indicated that fee increases would be capped at 8% for 2017.

According to Universities SA, an additional R2bn to R2.5bn per year is necessary for the next three years if another fee freeze is introduced for 2017.

The cost of free education, including student living costs, could range between R25bn and R70bn per year, according to calculations by Econometrix. 

* Visit our Budget Special for all the budget news and in-depth analysis.

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