University price hikes planned for South Africa – as government looks at new model

Higher Education, Science and Innovation minister Blade Nzimande has confirmed that government plans an inflation-linked price hike for colleges and universities in South Africa for the 2022 academic year.

In a media briefing on Monday (1 February), Nzimande said this will likely include:

  • A CPI increase to a maximum of 4.23% for tuition fees;
  • A CPI+2% increase to a maximum of 6.23% on accommodation fees.

“I would like to point out that fee increases are agreed upon in the sector as part of a social compact that has been in place since 2016, the only year when fees were not increased.

“Since 2016, we have worked together with the sector on inflation-linked increases, to ensure that fee increases remain affordable,” he said.

Nzimande said that the long-term stability and sustainability of the Higher Education sector relies in a significant measure on tuition and residence fee income to universities, with the government currently working on a new fee regulatory policy framework.

“It should also be noted that the costs of providing university education continue to increase, and it is therefore not sustainable to consider lower than inflation fee increases.

“Fee increases are necessitated by obvious factors, including, increase in workers’ wages and staff salaries, increase in electricity and water tariffs, rising food prices, books and learning materials, and generally the rise in inflation.”

Growing debt 

Data shared by Nzimande shows that student debt has grown in South Africa’s university sector significantly in recent years.

The unaudited data showed that an estimated R6.1 billion was owed by students at the start of the 2021 academic year

Audited accumulated gross student debt as of 31 December 2020 is R16.5 billion. The amount is inclusive of students who have exited the universities with debt.

A survey conducted by the Department in 2021 showed that an estimated 56.2% of students with debt owe less than R10,000; 32.9% owe between R10,000 and R50,000; and 10.9% owe more than R50,000. The survey also showed that NSFAS students owe R5.3 billion.

New model

In addressing matters of student financial aid and student debt, Nzimande said his department is hard at work developing recommendations for a comprehensive student financial aid model for the future.

This model will incorporate the existing funding available from the state and explore alternative funding sources, he said.

“While we are concerned about the long-term sustainability of the fully-subsidised funding for students from poor and working-class backgrounds, we are also concerned about students considered to be in the “missing middle” and the need for more postgraduate funding opportunities.

“In 2021, I appointed a Ministerial Task Team to support the development of a new student financial aid policy and I am looking forward to receiving the report from the MTT in the first half of 2022.”

Nzimane added that his department has already held talks with the Banking Association of South Africa on work that needs to be done to develop a possible loan scheme for students falling outside the NSFAS funding regime.

“For missing middle students, there are also other funding opportunities available both at an institution level and other sources. We urge that those who are looking for financial support to contact their financial aid offices at their respective institutions,” he said.

Read: South Africa’s middle class is in serious trouble

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