Over the past number of years there has been a decrease in funding in real terms from the government to universities across the country.
The Covid-19 pandemic has not only created a lot of panic and uncertainty, but also magnified and exacerbated the mounting financial pressure on institutions of higher learning.
To this end, institutions have had to find creative ways to generate income and manage their cash flow.
Prof Linda du Plessis, deputy vice-chancellor of the North-West University (NWU) and responsible for planning and Vanderbijlpark Campus operations, speaks on how the NWU is tackling student debt and budget cuts during the pandemic.
Surviving budget cuts
With the decrease in government grants in real terms and the economic impact of Covid-19, institutions of higher learning across the country have had to find ways to deal with the mounting financial pressure.
Budget cuts in other sectors have also had an impact on potential funding opportunities for postgraduate students.
Prof Linda says that the financial impact of Covid-19 is expected to peak not in the short term, but rather in the medium- to long-term space. Therefore it is important for the NWU to not only consider the immediate impact of any decision made, but rather analyse what the long-term financial implications will be.
Soon after the lockdown was announced, the institution developed a financial impact model that included a number of financial risk factors, together with assumptions that informed different scenarios on how they could influence the university’s budget. That enabled the university to respond swiftly to financial pressure, also after the government started cutting university grants due to the Covid-19 demands on Treasury.
“We have been using this model to manage the impact of Covid-19 by means of mitigation plans that are flexible, but prudent and cautious to manage the unknown as and when it occurs,” says Prof Linda. She further adds that the focus for the short term was on completing the academic year, as well as on preserving permanent and fixed-term staff positions. Operational budgets were adjusted to save money where possible, and reallocated to unforeseen expenses brought about by Covid-19. As a way to preserve human resources from retrenchments, the institution is filling only critical vacancies to save on the staff cost budget.
With increased pressure on the cash flow due to numerous factors, including the increase in outstanding debt, the block-grant subsidy that was deferred for some time in 2020, additional expenses that had to be incurred to support staff and students, and advancing NSFAS allowances to students without having received the normal up-front payment from NSFAS in 2021, the NWU’s focus remains on managing the cash flow during the pandemic.
Due to a decrease in government funding in real terms in the sector over the past few years the NWU has had to focus on income-generating initiatives. The university has come up with short learning programmes aimed at industry and stakeholders, it has formed research partnerships and collaborated internationally on projects, approached prospective donors for support, and liaised with industry to ensure that qualifications are market-related to attract funding support for potential students.
Working through a pandemic
Covid-19 and the lockdown threw an unexpected curve ball at the NWU, its students and staff. The university had to come up with a number of measures to ensure that teaching and learning at the institution continue.
Over the past year the NWU has had to accelerate its digital business strategy that is focused on moving the institution towards, and equipping its staff and students for the Fourth Industrial Revolution.
Over the past year, the NWU has steered its efforts towards ensuring that all students have access to connectivity, technological devices and data to continue with the academic programme. This was done by prioritising students for a return to campus based on certain criteria, providing more than 25 000 students with data, distributing laptops and zero-rating academic sites of the university. In cases where students struggled with digital connectivity during the initial lockdown levels, printed learning materials were delivered to them.
“A collaborative team effort between information technology and our Centre for Teaching and Learning ensured that our learning management system could handle the rapid transition to an online mode of teaching and learning. New templates and building blocks were also developed to streamline the creation of educationally sound eFundi learning environments.”
The NWU’s Library and Information Services (LIS) shifted its attention from print-based resources to electronic sources of information. Not only was more time dedicated to the virtual library, but this also used fewer financial resources, as the bulk of the print budget was shifted to electronic resources, which included e-textbooks. According to statistics, this initiative paid off, as there was an increase in the usage of all e-books – from 272 555 in 2019 to 359 820 in 2020 for the same period of January to June.
The student debt crisis
Over the past decade, 120 000 graduates from universities across the country have been unable to obtain their higher-education certificates due to outstanding fees.
According to the data released by the Department of Higher Education and Training, the NWU has 766 graduates who were unable to obtain their certificates due to historical debt. As at February 2021 the NWU, which is the second-largest institution in the sector, has among the lowest amounts of outstanding debt. Out of the R14 billion in outstanding fees that are owed to institutions, the NWU is owed only R194 million.
“At the NWU we have always followed the approach of considering the registration of students with financial constraints on a case-by-case basis. It is also in the university’s interest to get students to graduate rather than drop out. We have several university-funded financial support structures in the form of NWU-funded bursaries, including merit, post-graduate, recruitment and sports bursaries. Apart from these, we also provide staff study discounts, student employment opportunities and internships that aim to financially assist students,” says Prof Linda.
She says that the ultimate solution for universities is not to provide financial support for students from their already shrinking budgets, but rather to form partnerships with financial institutions and industry to assist academically deserving students. “No deserving student should be denied the opportunity to further their studies due to a lack of funding. At the same time, universities need to attract high-quality staff, provide a safe and conducive learning environment, and conduct research that contributes to a better future. Universities do not offer only academic programmes, but also a range of services aimed at ensuring the well-being of students, such as healthcare, counselling services and career centres. Sustaining these services requires capital and operational budgets,” says Prof Linda.
Although the pandemic has created panic and economic uncertainty, the NWU is more than ever committed to delivering teaching and learning and ensuring that no student gets left behind.