Fallacy of Free Higher Education Moving the Fees Debate from Ideology to Evidence Nico Cloete UWC Institute of Post-School Studies

Free Higher Education The Constitution – the state, through reasonable measures, must make higher education progressively more available and accessible Fees Commission – enquire and make findings on the feasibility of fee-free higher education in South Africa (how many groups can raid the treasury?) Bakarat (OECD 2015) – there is no such thing as “free higher education”. Universities are very expensive. The question is Who Pays How Much When? Cloete (2016) – what is required for a sustainable higher education system with affordability for those who qualify for access? Statistician General (Wednesday 26 Oct) – free higher education is a nonsense concept, South African’s must stop using it Source: The Conversation: The wrong questions are being asked in the free higher education debate, 27 September 2016

Private/public returns to HE Globally, and in Africa, there are considerable benefits to HE. In Sub-Saharan Africa, private returns to HE are higher than returns to primary and secondary education. The region with the highest private returns to HE is Sub-Saharan Africa. South Africa has the highest private returns to HE in the world: South Africa 40, Ghana 28, Uganda 23, Mauritius 21, Mexico 20, Brazil 17, Turkey 14, US 14, Spain 11, Norway 10 Higher education also has numerous private benefits such as higher salaries, savings, professional mobility, life expectancy and quality of life. Public benefits include greater productivity, increased consumption, workforce flexibility, reduced crime rates, greater appreciation of diversity and improved ability to new technologies. Statistician General – considering the private benefits and the fact that SA has such high graduate employment, the fees policy question is: “Do students pay while at university or while they are working? - I prefer the latter.’’

Unemployment by education level and race (university graduates) Source: Pali Lehohla, StatsSA

Private returns to education by level and region (2014) Source: Montenegro & Patrinos (2014). Graphic by CHET/Francois van Schalkwyk.

South Africa has the best HE system in Africa SA has the most diverse and differentiated HE system in Africa. In 2008, SA HE system ranked by Shanghai between 27-33 along with the Czech Republic, New Zealand and Ireland. Times Higher (2015) rated BRICS and developing countries. In the Top 12 BRICS: SA 3 universities (UCT 4th; Wits 6th; SU 12th) Brazil and Russia 1 university each India with a billion people has 0 China 6 (massification with 30 World Class) 4. PhD transformation from 1996-2012: Proportion of black graduates increased from 13% to 58% African women graduates increased by 960% No increase in white male graduates for the same period In 2012, more African than white graduates (Cloete, 2015) 5. The reputation of SA HE is based on the postgraduate system. It is crucial for development in SA, and Africa, that SA maintain and strengthen the new knowledge producing subsector of HE.

What is wrong with the best system What is wrong with the best system? The shape of the system & inefficiencies On the opening morning of the National Commission on HE (NCHE, 1995) Prof. Reddy (chair) said that the biggest problem facing HE in SA is the shape of the system. The shape problem was an inverted pyramid: too large a proportion of students in universities, too small a post-secondary college sector, and too small a private PSE sector. From 2010 a major shift has occurred: TVET college enrolments have increased from 404 000 in 2010 to 781 000 in 2014 (107% % growth). In contrast, university enrolments are stagnant at around 1 million. A major problem for SA, and a serious investment issue, is that while SA has 2 million students in post-secondary education, there are 3 million 18-24 year-olds not in education, employment or training (NEETS).

South Africa post-school system, 2010 vs 2014 Source: DHET HEMIS 2012. Compiled by Charles Sheppard. Graphic by CHET/Francois van Schalkwyk.

Only 30% graduate after 3 years Progression from Grade 1 to Bachelors Degree (current estimated figures) Enter Grade 1 1 million Write matric 600 000 Pass matric 400 000 Enter universities 100 000 👤👤👤👤👤👤👤👤👤👤👤👤👤👤👤👤👤👤👤👤 👤👤👤👤👤👤👤👤👤👤👤👤 👤👤👤👤👤👤👤👤 👤👤 33 000 drop out after 2 years Graduate after 6 years with first degree 53 000 1 in 20 school entrants obtain a first degree 👤 Only 30% graduate after 3 years Source: S. Van der Berg (pers. comm.). Graphic by CHET/Francois van Schalkwyk.

Inefficiencies in the undergraduate system Of the 1 million kids who enter Grade 1, only 100 000 will enter university, and 53 000 will graduate after 6 years (Van den Berg, 2015). Contrary to common belief, the undergraduate system has only been growing at 2.5% per annum for new entrants (2000-2014), this is very slow growth by standards of HERANA flagship universities in Africa. Very poor graduation rates – 30% graduate in 3 years, 53% in 6 years (if UNISA included it drops well below 50%). National diploma even worse: below 20% complete in minimum time and less than 50% complete at all. Average annual growth for returning undergraduates 4%. Too many students stay in the undergraduate system for too long. All or nothing system: drop out or graduate. With high premium on tertiary certificates, associate degrees (after 2 years) must be considered. The Honours degree is not well funded by NRF or NSFAS, and is a major blockage for black students to masters and PhD study. (Colonial heritage) There are too many academically “poor” students in the university system. The current university undergraduate system is inefficient and unsustainable and needs to be restructured.

Contributors to Inefficiencies (elephant) Costs are skyrocketing – Australian system remained on national inflation index for 20 years, SA HE (10-11% ) grew at twice the national inflation rate (5-6%). Exorbitant costs of managerial packages: VCs earn on average 3 times more than senior professors; the “managerial class” who earn more than a senior professor number between 30 and 50. Twenty years ago it was only the VC and the Chief Financial Officer who earned more than a full professor. Use of infrastructure, particularly education buildings and facilities, is very low by international standards There has to be MANY more sites for skills training that offer alternative ladders than universities and TVET colleges. SA has to explore and deliver more “blended” education opportunities. But the biggest wastage is undergraduate failure – “even a thumb-suck figure is so controversial and so large that I will not mention it” (education statistics expert). Possible perverse incentives of free higher education (accommodation and fees).

POLICY Funding and fees A government divided = no pact & disconnected discourses POLICY Funding and fees The Interpreters (fallist apologists) PACT on role of HE The State Government POLITICS Identity, resource contestation, regime change

Selected CHET publications Cloete N, Mouton J & Sheppard C (2015) Doctoral Education in South Africa. Cape Town: African Minds. View online. Cloete N (2015) Flawed ideology of free higher education. View online. Cloete N (2016a) Free higher education: Another self-destructive South African policy. View online. Cloete N (2016b) For sustainable funding and fees, the undergraduate system in South Africa must be restructured. South African Journal of Science (March/April). View online. Langa P, Wangenge-Ouma G, Jungblut J & Cloete N (2016). South Africa and the illusion of free higher education. View online. Pillay P (2011) Linking Higher Education and Development. Cape Town: CHET. View online.

www.chet.org.za Nico Cloete | ncloete@chet.org.za Charles Sheppard François van Schalkwyk www.chet.org.za