The current model in place for funding and subsidizing universities is flawed and functions ineffectively according to experts in the higher education sector. There are fears that not changing it can result in dire long-term consequences for the sector going forward.
The tertiary education sector has recently returned to the normal way of carrying out its academic activities following a disruptive two years of having to adapt to regulatory change brought on by the Covid-19 pandemic.
However, this move by the sector has not been without any issues as a variety of experts in the sector are warning that funding for universities is in jeopardy. As a practical solution, they are calling for a complete overhaul of the existing funding model provided by the Department of Higher Education and Training (DHET) to universities.
According to Mr. Manie Regal the Chief Finance Officer at the University of the Western Cape, the current university subsidizing model, which has been in place for over 50 years, is inefficient and needs to be reviewed.
One thing we cannot ignore is that when operational planning decisions are made, finance professionals are left out and come in as an afterthought, as they get told to make things happen. We need better integration in our planning, going forward.
Regal also pointed to the current state of the National Student Financial Aid (NSFAS)’s questionable capacity to fund all tertiary students this year as a reflection of the extent of the problem.
Earlier this year, the DHET announced that NSFAS had a shortfall of R1.5 billion. A shortfall of R1.2 billion still remains despite the sector’s best efforts to have it reduced.
Most universities incurred additional costs related to blended learning by investing in internet infrastructure and connectivity and the security of that infrastructure.
As it currently stands, the primary sources of funding for South African universities are the Department of Higher Education and Training (DHET) block grants based on the system of full-time student equivalents (FTEs) and student fees.