What effect did the recent Fees Must Fall campaign and resultant 0% hike in tuition fees have on the NWU? How is the university coping? Is it able to balance its books?

 

These questions must have troubled many an alumni. To find answers, we asked Elmarie de Beer, executive director for finances and facilities at the NWU, to tell us more about the steps the university is taking to overcome these challenges.

Q: Looking at the bigger picture, what consequences does the 0% increase in fees have for the higher education sector in South Africa?
A: The 2016 shortfall for the whole sector is estimated at approximately R2,3 billion. Of this amount, the Department of Higher Education and Training has contributed R1,9 billion. This means that the universities in South Africa have to come up with R394,7 million.

 

Q: What does it mean in practice for the NWU?
A: It means that we had to revise our budget to make up for the shortfall.

 

Q: Which budget items were affected?
A: We have allocated less money to spend on, for instance, infrastructure projects and staff costs such as the annual cost of living adjustment, bonuses and new appointments.

 

Q: What long-term consequences may all this have for the NWU?

A: Unfortunately there will be less money for growth. Without money for expanding our facilities and appointing more staff, for instance, it will be difficult to admit more students.

 

It is also still not clear if and to what extent government is going to regulate annual tuition fee increases in future.

 

Q: Why is it necessary to increase tuition fees every year?
A: The main reason for the year-on-year increase in tuition fees is the year-on-year decrease in real terms in subsidy from government and National Student Financial Aid Scheme (NSFAS) funding.

 

It is estimated that higher education inflation is about 2% higher than the consumer price index. As the government subsidy has not kept up with higher education inflation and the annual growth in the sector, institutions have had to increase tuition fees every year to fill at least part of the gap – to a point where this has now disrupted the sector.

 

The same applies for the year-on-year decrease (in real terms) in NSFAS funding, resulting in fewer students being assisted.

 

Q: But didn’t NSFAS give the university more money?
A: Yes, they gave us R104 million extra this year, but this money is meant for helping students, not for making up the shortfall on our budget. In fact, they are actually only settling the historical debt of the previous years.

 

Q: What do you mean by ‘historical debt’?
A: This relates to those students who were able to start their studies with own funding, while awaiting NSFAS bursaries that in the end did not materialise. With the extra money we have now received from NSFAS, qualifying students with outstanding debt for 2013, 2014 and 2015 are able to continue their studies in 2016.

Furthermore, Dr Blade Nzimande, minister of Higher Education and Training, announced that first entrants qualifying for NSFAS funds should be registered for 2016 while additional funding is sought. In the meantime the NWU has to stand in for the money allocated to students, putting tremendous pressure on our cash flow.

 

Q: How does the financial future look for higher education in South Africa?
A: On the one hand, the management and governance bodies of universities will have to come up with innovative ways in which higher education is delivered and managed in the future. Government, on the other hand, will have to come up with a viable new funding model.

 

In short: we have to take hands. Neither the universities nor the government is able to “tow the line” on their own – in fact, even students should join the team effort.

 

Q: Is there a silver lining to this dark cloud?

A: Fortunately, we have a very competent team of financial experts at the NWU – we are doing our best to manage the situation. Furthermore, I can assure you that the universities and government are having regular discussions to find financial solutions.

 

Q: How can alumni help?
A: Donations are always welcome – even more so now than before. It is obvious that we can’t only rely on subsidies, tuition fees or the income we receive from various business and commercialisation ventures. We have to increasingly look at external funding to survive and prosper.