NWU Business School Think Tank – NSFAS and the consequences of government cost cutting

This past week the Business School at the North-West University (NWU) held a think tank focusing on the National Student Financial Aid Scheme (NSFAS), and specifically on the consequences of government cost cutting in the 2021 budget with respect to tertiary education.

There was consensus that the consequences of a capital deficit have an enormous direct impact on universities. Academic institutions land in the crossfire between the government and society every year, and the demographic and social development of the country is left with a whole range of unforeseen consequences.

The promise of free higher education that former president Jacob Zuma made in the winter of his presidency had enormous consequences for the Treasury, but also for universities, and even more for students who have no other financial solution than government funds. The focus of the think tank was on steps or actions that can be taken to address the problem, rather than on pondering the familiar problems.

NSFAS not only provided students from poorer and lower middle-class communities with access to tertiary-education institutions, but also enabled universities to diversify and transform. The student demographics cannot come only from privileged families, particularly because prosperity is largely limited to just less than 10% of the country’s population. Accessibility is probably the largest single inhibiting factor for attempts to address inequality and poverty.

Although NSFAS does not fund only black students, it is probably true that the lack of funding has the biggest impact on students from the black lower middle class. The parents of most of these students are part of a first-generation middle-class group, and academic training of one or more children leads to impoverishment that places the entire family in extreme financial need.

Post-school training is vital to the social mobility of an economically active population. The only way in which the mobility of economic classes can be guaranteed is to establish a constant demographic dividend. The dividend must consist of the ownership of assets, access to capital, scholastic and tertiary training, and access to medical care. Without that, individuals in a particular socio-economic class stagnate, which, in turn, leads to endless political tension and frustration.

NSFAS is an extremely important government intervention – just like the monthly grants – in pursuit of a more equitable outcome for South Africans who are either excluded from the formal economy, or who experience their status as part of the middle class as vulnerable because of the slowdown of the economy.

Globally, the middle-class group is under enormous economic and financial pressure, sometimes with catastrophic consequences for the prospects of post-school training. In the USA there is enormous public pressure on legislators to either write off student debt or manage it as a political variable. For the first time in the history of American elections student debt was part of the ideological conversation regarding the role and function of the state. Like South Africa, the American democracy is extremely dependent on the political stability brought about by middle-class societies. The economic mobility that exists between classes is vital to the establishment of middle-class values.

The question is now – in the light of the dire need for government capital in South Africa and the pressure this will place on universities with respect to service delivery to students – what strategies are available to academic institutions. The discussion at the NWU Business School is definitely a guide to the financial issues that probably out of sheer necessity exist at all universities. It is essential for higher-education institutions not to lose their academic sovereignty, but it is also true that the availability of capital in the private sector and from international non-governmental organisations should be investigated urgently.

Like almost all the speakers at the think tank argued, it is a process of relationships that should be addressed at faculty and even at departmental level. Most universities already have numerous research institutions that, in collaboration with companies and entities with an interest in new knowledge, can obtain funding. Several of our universities count among the thousand top universities in the world, and we are located extremely strategically with an ample institutional memory that can facilitate cooperation agreements. However, there is consensus that South African academic institutions do not utilise these options optimally, particularly in the light of the best-practice method that already applies internationally in this regard.

Another source of income is students with the academic ability to study successfully, but who are turned away every year because of limitations on the capacity of our institutions. Many of these students will probably come from a wealthier part of society and be able to pay for academic training themselves. However, there will also always be large numbers of potential students who can only afford post-school training if it comes at a much lower price. This is where the accessibility offered by technology can make the difference.  

Most universities have already developed platforms that make virtually all access to the academic programmes available at a very low price or at almost no cost. Roughly every university in South Africa can provide access to literally thousands of students who already have access to the necessary funds, but also make provision for families under financial pressure by simply offering technological training at a much lower price.

The “invisible hand” of technology is in fact the extent to which it makes complex systems accessible and cheaper. As a form of empowerment it creates an important space where the government and the private sector can develop a common interest. Assessment is still a variable that offers a lot of uncertainty, but it can now be viewed as no more than a logistical complexity for which well-planned solutions will be found over time.

However, the real problem is that even middle-class families sometimes experience extremely dysfunctional circumstances. As much as 63% of South African children live in a household in which the fathers have no social or financial presence.

While education and training offer the possibility of an escape route from this sociological chaos, it is still a complicating factor that will have to be managed without the state. However, academic institutions have an important role and function in this regard, which, by the way, can also supplement their income base in the process and accomplish a degree of social stability.

It is difficult but possible to establish technological environments in remote communities or in dysfunctional families that offer students a degree of protection in the chaos of absolute and relative poverty. We will still have to do a lot of thinking, but there is reason for being optimistic that innovative thinking, access to technology and the will to be exclusive can make the academic ivory tower more user-friendly.


Submitted on Wed, 04/28/2021 - 12:04