‘Funding the missing middle’: UP online dialogue explores lack of student funding

Posted on December 01, 2021

The University of Pretoria (UP) and the Ikusasa Student Financial Aid Programme (ISFAP) recently hosted an online dialogue that focused on the importance of student funding.

Shane Perrier, Head of Fundraising and Strategy at ISFAP, moderated the discussion, and started the conversation by offering an introduction to ISFAP, a non-profit and public benefit organisation. “We focus on the missing middle and poor students, and we fund them for the full course of studying. We have a combination of government, domestic and international funders. Over the past five years, we’ve deployed close to R1 billion rand in funding to over 2 300 students and have graduated 400-plus students.”

UP Vice-Chancellor and Principal Professor Tawana Kupe and Sizwe Nxasana, founder of ISFAP, were panellists.

Speaking about the impact of the COVID-19 pandemic on the education sector, Nxasana said, “COVID-19 has increased the gap between the haves and the have-nots. Since the advent of COVID-19, we’ve seen a lot of children taken out of early childhood development centres because parents are concerned about the transmission of COVID-19. Therefore, the system of education has lost a lot of young people, and we know how important education is in the formative years, especially in the first 1 000 days. We are going to see the impact of that later in the lives of the children.”

Prof Kupe directed his attention to the impact of the pandemic on the higher education sector specifically. “The higher education sector in South Africa has been experiencing financial challenges since the #FeesMustFall campaign and the demand for free higher education,” he remarked. “The sector experienced a zero percent increase in 2016 and limited fee increases since then. Government subsidies have not increased in line with the increased running costs. Since the advent of COVID-19 in 2020, financial challenges have been exacerbated.”

Universities, he added, also incurred unbudgeted expenses related to protective equipment, sanitisers and deep-cleaning. The provision of laptops and data also had to be taken into account, as well as other expenses that had to do with the transition to online teaching and learning.

“Many students and their families who were impacted by the pandemic were unable to settle their outstanding fees,” Prof Kupe continued. “The University has experienced decreased levels of income from donations, sponsorships and contract income (third-stream income) due to the negative impact on the economy as a result of COVID-19.”

As to the challenges faced by the missing middle, Prof Kupe said, “The government is not funding the missing middle. This is why an organisation like ISFAP is important, but ISFAP alone cannot fund all those students. We need substantial economic growth in order to bridge those gaps.”

The conversation then moved on to ways in which student debt can be addressed. “We need a more comprehensive approach to addressing student debt,” Nxasana said. “We can’t just write cheques without fundamentally addressing some of the systemic and structural issues that sit in our system. We should be producing skills for people to become entrepreneurs and creating a whole system around venture capital. These, among other solutions, are ways in which we can address how to produce human resources in our country that are going to sustain economic growth over the long term.”

Universities cannot write off debts, Prof Kupe added, as this will lead to higher education institutions becoming insolvent. “A possible source of funding historic debt may be the National Student Financial Aid Scheme (NSFAS), which is already struggling with the significant growth in qualifying students and funding requirements. The issue is that the tax base is not growing at a similar rate of required student funding. This means that the size of total funding remains unchanged, but certain beneficiaries, like the NSFAS, will have to get a larger portion, resulting in reductions in other areas such as block grants, earmarked grants and infrastructure grants. Reducing infrastructure grants will have a significant impact on an already aged infrastructure system. Sometime in the future, significant amounts will be required to bring existing infrastructure up to a reasonable condition and the concern is that the required repair and maintenance will be unaffordable.”

- Author Mecayla Maseka

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