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 Wildschut Human Sciences Research Council 21 October 2014

Social science that makes a difference Problem 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 PSE contribute 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 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 Education Funding for universities comes from three main sources: Government subsidies Tuition fees 3 rd 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

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 sector HeadCount (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 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 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