Date: 25/02/2010
Source: The Democratic Alliance
Title: DA: James: Speech by the Shadow Minister of Education, calling for a university funding model overhaul, at the University of Cape Town

There are many able students who have the talent, ability and temperament to be at a university or college but are not because they lack the means. There are many students who would like to improve their matric results in order to qualify for university entrance by attending a private college but cannot because they lack the means.

During 2009, Parliament's Portfolio Committee on Higher Education & Training was incensed to discover that the universities returned R40 million in unspent funds to the National Student Financial Aid Scheme (NSFAS). Some universities claimed that they could not find eligible students. The problem is that the financial aid system is a dinosaur.

Cabinet yesterday finally received the report reviewing the National Student Financial Aid Scheme (NSFAS). Initiated by Science & Technology Minister Naledi Pandor when she was Education Minister, the review was led by Dr Marcus Balintulo and dealt with some vital issues affecting the lives of students at our universities and colleges.

Presented to Cabinet for noting, the Review will be released in the public domain sometime during March. I do not know what it contains and eagerly await its release. It was quite clear though that one fundamental problem is the income threshold that has become the norm for being eligible. Applicants are means-tested and parents make graded contributions.

Although there are exceptions, students from families where parent(s) earn about R120,000 or more per year tended to fail the means test. This excludes upper working class and lower middle families, for example where the father is a policeman and the mother a nurse. I have asked Minister Blade Nzimande twice in 2009 to adjust the threshold and he refused.

I recently received correspondence from a third year student at UKZN Howard College Campus. The student said that, due to her current financial condition, she could not afford to study - her mother had died when she was young, and she is currently living with a relative and dependent on their support for her daily needs.

This student and many others who have written to me could not wait for Minister Nzimande's Review Committee report, which still has to go through a process of public debate. It is deeply unfortunate that so many students missed an entire year of university education because of a lack of urgency when it comes to the income threshold.

Some of the other issues considered by the Review Commission may certainly wait for public discussion. We will argue strongly then for the introduction of ‘an opportunity voucher' system, where students would receive bursary voucher directly from NSFAS and use these in a flexible manner at accredited higher education institutions based on agreed academic plan.

This is how it would work: instead of working only with universities and their financial aid offices, NSFAS would also work directly with students. Like other institutions operating in the financial services sector, NSFAS develops a range of products that bring students and opportunities together and inject some competition between individual universities.

The financial products come in the form of vouchers granted to a student based on academic and means-tested financial criteria. One product would allow a student to improve their matric results by attending a college (public or private) of their choice. Another product would be a voucher to study at a university or college. Other products are possible.

The vouchers can be cashed in at public and private universities. This would energise the private sector and communities to create independent universities that would enlarge the opportunities pool and escalate the number of individuals with tertiary qualifications so desperately needed both as skilled employees and young entrepeneurs.

The ANC in government is very suspicious of private sector initiatives in education. Higher Education & Training Minister Blade Nzimande is by ideological inclination hostile to the private sector, even though we see him exchanging jokes and smiles with that arch-capitalist Johann Rupert at his installation as Chancellor of the University of Stellenbosch!

When it comes to private colleges and universities, the general tone of the discussion in Parliament's Higher Education & Training Portfolio Committee is to treat these as all potential ‘fly-by-night' operations. Though there are many chancers in the world, we should not forget that the best universities in the world such as Harvard or Yale or Stanford or Chicago are private ones.

The funding of universities has elements of the voucher scheme in that each student comes with a per capita amount from the government. This does, up to a point, encourage universities to compete for students. However, better universities inspire resentment and university autonomy is already compromised by an interventionist government which sees it as its right.

The Democratic Alliance will promote the development of independent universities that compete with each other in every way, including competition over what are in effect the vouchers now provided to students by government. We believe that competition will create more opportunities and choices for students and result in a better educated population by far.

Having choices implies that students should know from which alternative institutions, degrees or certificates and courses they should choose. Choice presumes that students have information about alternatives but indications are that they do not. To remedy this career-guidance should be reintroduced at schools and all efforts be made to provide credible information to students.

Public universities must work better and more efficiently. NSFAS should make public which universities and colleges annually return unspent bursary funds to them. Transparency about under-performing institutions should prevail and the institutions involved be held to account. An annual rating system of universities and college as they have in the United Kingdom should be introduced here.

Better performing government-funded institutions and the expansion of independent government-subsidised private institutions using an ‘opportunity voucher' system has the potential to significantly enlarge our population of talent and, by introducing more competition, improve the quality of education and research too. To get there requires a different higher education finance model. Watch this space.