Minister Prof Mkhize on the release of the Heher Report

On 13 November, the President released the Report by the Heher Commission of Inquiry into the funding of higher education and training. I welcome its release.

The Commission makes a number of recommendations across a range of issues. It includes recommendations on how to fund students across universities and TVET colleges, as well as on strengthening institutions and the education they provide to our citizens.

The President’s press release (right) summarises some of these findings very well and I will not go into them in any detail.

The Inter-Ministerial Committee on Higher Education Funding, led by Minister in the Presidency Jeff Radebe, and the Presidential Fiscal Committee led by Minister of Finance Malusi Gigaba, have been tasked by the President to process the report in detail.

I will work closely with them as we unpack the recommendations of the 752- page document. We welcome the Presidency’s decision to release the report to the public. This will provide an opportunity for the academic, the student, and broader communities to study it and to familiarise themselves with the detail of Judge Heher’s findings, proposals, and alternative scenarios.

This will ensure that comment and discussion can take place against an informed backdrop and not on the basis of speculation.

I want to be clear. The Report received from Judge Heher and his co-commissioners, Advocate Gregory Ally, and Leah Khumalo, provides Government with recommendations on a wide range of issues dealing with higher education and training, including university education and technical and vocational education and training (TVET).

The Commission has done considerable work processing information and views from a wide range of sources to inform their recommendations.

However, it is very important that all of us, the public, students and institutions, fully understand that the report does not pronounce on anything. It does not contain decisions.

It provides Government with recommendations only. Decisions still have to be made by government.

Government must have the space to conduct a thorough due diligence. It will weigh up all aspects of the proposals, including their possible knock-on effects.

Only then, will the President announce a way forward which is able to ensure that we empower future generations of young people through knowledge and skills.

Thereby, empowering their families and communities too. The policy decisions we make, having considered the recommendations in the report, must lead to sustainable solutions that will endure for many years to come.

As a country, we have to move from the adhoc situation which has persisted since 2015, to a situation of greater certainty about these matters going into the future.

In closing, I appeal to all constituencies, especially student leaders and management, to ensure a peaceful end to the academic year.

This includes allowing examinations to be completed without disruption. The security and safety of staff and students on our campuses must not be compromised.

The right of almost a million students across the country to conclude their academic year and to get on with their lives, cannot be sacrificed when we are so close to a resolution of the fees issue.

RECOMMENDATIONS OF THE HEHER COMMISSION

The recommendations of the Commission can be summarised as follows:

FUNDING THE POST SCHOOLING EDUCATION AND TRAINING SECTOR

The Commission recommended that government increase Block funding to the Post School Education and Training Sector (PSET) as a whole, in line with increased costs for providing quality education and infrastructure needs.

The Commission recommended that government increase its expenditure on higher education and training to at least 1% of the GDP, in line with comparable economies.

The Commission further recommended that government pay particular attention to the Technical and Vocational Education and Training colleges as they cannot perform optimally at their current funding levels.

STUDENT ACCOMMODATION

On student accommodation, the Commission found that there is a severe shortage of student accommodation across the higher education and training sector. The Commission recommended that government adopt an affordable plan to develop more student accommodation and that Historically Disadvantaged Institutions be prioritised. The commission further recommended a Public-Private Partnership approach when responding to the student accommodation challenge.

ONLINE AND BLENDED LEARNING

On the option of Online and Blended Learning; the Commission recommended that Government must further investigate the viability of “online and blended learning”. This medium could be considered as an alternative in addressing the funding and capacity challenges currently facing the higher education and training sector.

FUNDING FOR TECHNICAL AND VOCATIONAL EDUCATION AND TRAINING (TVET) STUDENTS

The Commission made the following recommendations regarding the funding of students at TVET colleges:

• ● That all students at TVET Colleges should receive fully subsidised free education. This would be in the form of grants that cover the full cost of study and that no student should be partially funded.

POSTGRADUATE STUDENTS

• ● The Commission recommended that the NRF bursaries (based on merit, or other criteria as developed by the NRF) for postgraduate students be retained and expanded when possible.
• ● The Commission further recommended for Postgraduate students to have access to a cost-sharing model of government guaranteed Income-Contingency Loans. These should be sourced from commercial banks (ICL).

HISTORIC DEBT

It is recommended that students with debt, who have since graduated, be offered incomecontingent loans (ICL) as well.

NSFAS

The Commission recommends that the participation of the National Student Financial Aid Scheme (NSFAS) in the funding of university students be replaced by the ICL system. NSFAS should be retained for the provision of the funding of all TVET students and TVET student support, if such retention is considered necessary.

FUNDING FOR UNIVERSITY STUDENTS

The Commission recommends that all undergraduate and postgraduate students studying at both public and private universities and colleges, regardless of their family background, be funded through a cost-sharing model of government guaranteed Income- Contingency Loans. These would be sourced from commercial banks. Through this costsharing model, the Commission recommends that commercial banks issue government guaranteed loans to the students. These would be repayable by the student upon graduation on the attainment of a specific income threshold. Should the student fail to reach the required income threshold, government would bear the secondary liability.

In implementing this model, the Commission recommends that the existing NSFAS model be replaced by a new Income Contingency Loan System.

Should government be opposed to this model, the Commission recommends that government consider the “Ikusasa Student Financial Aid Programme”. This is an Income Contingency Loan Funding Model proposed by the Ministerial Task Team on Funding for Poor, Working Class and Missing Middle Students.

The Commission further recommends that government considers the introduction of a university fee capping mechanism to avoid the ‘cancelling-out’ effect. Some key points of the ICL model are the following:

• Repayment only begins when the student reaches a certain income threshold;
• Repayments only continue until such a time as the loan is paid off;
• The repayment period could be set to a maximum period so as ensure thatpayment does not impact on retirement accumulation;
• Students could be allowed to settle the loan over a shorter period should they be able;
• Those who emigrate could be required to pay off the loan before leaving;
• Loans could be made available to all students (Private and Public Universities);
• No means test;
• The financing of every university student is achieved through a bank loan offered at a rate favourable to the student. Whether such financing should extend to the full cost of education will depend solely on the choice of the borrower and his need for such an extension;
• Collection and recovery of the loan will be undertaken by SARS through its normal processes;
• The state can guarantee the loan or, better still, purchase the loan, so that the student becomes a debtor in its books. Prof Fioramonti, in his model, proposed the inclusion of the banks as lenders to students. This would be with a government guarantee, so as to cover the cost for the initial years;
• No student is obliged to repay a loan unless and until his or her income reaches a specified level. At the lowest specified level, the interest rate is at its lowest but will increase in accordance with specified increases in income growth;
• If the loan is not repaid within a specified number of years, the balance can be written off. The State will repay each student loan to the bank at a given date (say five years from the first advance).

REGISTRATION FEES

The Commission recommended for application and registration fees to be scrapped across the board.

Source TVET College Times