Important research inputs on #FeesMustFall

fees

I have been meaning to blog about some new research on access to higher education that was published earlier this week: “Higher Education Access and Outcomes for the 2008 Matric Cohort” (Van Broekhuizen, Van der Berg & Hofmeyr, 2016). I will only highlight some of the key points from the 122-page Working Paper which is really worth reading in its entirety. Essentially the researchers used the matric data from 2008 and followed these students (using their ID numbers) into the higher education system using data from the Higher Education Management Information System (HEMIS). Perhaps the most striking feature is that of the 100 students that started school, only 12 ever access university (9 immediately after matric and 3 later), 6 get some kind of qualification within 6 years and only 4 get a degree within 6 years.

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Secondly, that matrics that attend quintile 5 schools (almost all of which charge fees) are four times as likely to access university than those from the poorest 60% of schools (quintiles 1-3), all of which are no-fee schools. However, it’s encouraging to note that of those quintile 1-3 student that do qualify with a bachelor’s pass, more than 63-68% do actually access university, compared to 70% among quintile 5 students.

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Much of the paper points to that fact that unequal access to university is rooted in a highly unequal schooling system where access to high-quality schooling largely depends on a family’s ability to pay school fees. If one looks at the cumulative matric average achievement by race one still finds enormous differentials. While 60% of White matric students achieved 60% or more in matric, only 5% of Black African matrics score at or above 60%. And this is only among the students that actually made it to matric which is only slightly more than half the cohort (see this paper).

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The last piece of their research that I want to highlight is that the student intake at different universities is vastly different. If one looks at the matric marks of the typical student entering UCT, Stellenbosch, UP or Wits one can see below that they scored 70% or above on average. This is in stark contrast to those students entering TUT, Fort Hare, Uni-Zulu, Walter Sisulu, UWC etc., all of whom have incoming students whose average matric mark is less than 60%. At the Central University of Technology (CUT, in Free State) the average entrant scored 50% in matric.

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At the beginning of last year Professor Servaas van der Berg gave a Brown-Bag Lunch Seminar at Stellenbosch University  on “The Distributional Implications of Student Fees.” I include some notable excerpts and graphs below:

“Education has a number of properties which make the analysis of the demand for it both interesting and complex. … (Education is) …a consumption good and a capital good, i.e., although much of the expenditure is justified in terms of the effects on the individual’s income in the future, many of the activities of educational institutions are primarily justifiable in terms of their immediate consumption benefits. Moreover, education affects individuals’ future incomes.” – (Stiglitz 1974: 349)

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Perhaps most striking are Van der Berg’s estimates of who actually makes it to university and where they come from in the income distribution. According to these estimates, there are more students attending university from the richest 10% of the income distribution (Decile 10) than from the poorest 80% of the income distribution (Deciles 1-8 combined).

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Last month Nico Cloete (from CHET) gave a lecture at SALDRU (UCT) titled: “University Fees in SA: A Story from Evidence.” I include some relevant slides from his presentation:

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Anyone who wants to contribute to the debate about university fees needs to grapple with the realities presented by these three papers/presentations. At the end of the day we need to be able to answer the question of where the money will come from. A Graduate tax? Debt? The Education or Health budgets?

The most reasonable (and probably workable) solution that I have heard is that proposed by Prof Van der Berg who suggests that we should use the existing financial services infrastructure (banks) who could provide government-backed grant-loans (my terminology not SVDB’s) to students that qualify for university. It would be a grant that converts into a loan if a student successfully completes their degree and starts earning a decent income. It would still require a huge amount of government finance to provide the surety to banks for students who come from households that earn less than R500,000 (or some threshold). But, unlike with totally ‘free’ education, the students that do successfully complete their degrees would ‘pay-it-forward’ and contribute to the fund used to finance future students. boom

Also, as a side-issue, the Fees Commission needs to get a fast-tracked timetable and told to release at least a preliminary report and recommendations before the end of the year. We cannot wait until June next year. The political hot-potato would have been passed along one too many times from VCs to DHET to Treasury and eventually it will just explode. A stitch in time saves nine.

(If you have any additional research suggestions please send me an email and I’ll include them in this post)

Additional inputs from readers: 

Between the Devil and Deep Blue Sea? The Financing of Higher Education” 3×3 article by Philippe Burger – Sept 2016 (Thanks Marisa!).

Abstract: “Higher-than-inflation increases in student fees since 2009 often are blamed on declining government subsidies to universities. This is not entirely correct, if one considers real per-student subsidies. Fee increases resulted mainly from cost pressures faced by universities due to growing student numbers and a weakening rand. These pressures will not disappear. Eliminating government wastage is not a durable solution and difficult choices cannot be avoided. So, who should pay for increasing costs, students or government – or which combination of these?”

Kagisano Number 10 – Student Funding” – CHE (April 2016)

Description: The tenth issue of the CHE’s journal, Kagisano, brings together a number of papers that were presented at a CHE colloquium on student funding that was held in December 2013. The colloquium took as its point of departure the Funding chapter of South African Higher Education Reviewed, and the various papers, presented by experts who responded to a call for papers, all address in different ways the student funding crisis that reached a head with the #feesmustfall campaign in late 2015, and that continues to underlie student unrest in higher education. Different ideas on how to restructure student funding are presented, and the solutions range from the philosophical to the practical. This issue aims to contribute to the ongoing conversations, negotiations and policy-making aimed at ameliorating the intractable challenge of how to fund increasing access to higher education while ensuring that students receive a quality higher education experience.

19 responses to “Important research inputs on #FeesMustFall

  1. Excellent piece. Perhaps worth including bits on black tax, lower rates of graduate employment for black students etc. (which as I understand is part of the argument against an increasingly rolled out student financial aid scheme?).

  2. Nic I can’t make sense of this statement as based on the third figure on the deciles: According to these estimates, there are more students attending university from the richest 10% of the income distribution (Decile 10) than from the poorest 80% of the income distribution (Deciles 1-8 combined). The figures as I see them don’t add up. Can you help explain?

  3. Indeed. For those interested in graduate unemployment rates see this 3×3 piece – http://www.econ3x3.org/article/how-high-graduate-unemployment-south-africa-much-needed-update

  4. @Carol – if you add up the blue bars in each of the columns Decile 1, Decile 2 etc they will sum to less than 45,000 which is the approximate amount coming from Decile 10.

  5. @Nic – No, if you add up the blue bars for deciles 1-9, they sum to about 52,000. The figure does show that the majority of students come from the top income quintile. If I understand this analysis correctly, it shows that only about 1 in 20 young people from poor households (deciles 1-5) qualifies for university and that only a quarter this already small group actually get to attend one.

  6. Another reason why fees rise higher than general inflation – and it is similar for other service sectors – is that wages generally equal, or slightly outpace – inflation, and – as a broad brush – productivity growth lags in services versus manufacturing, for example.

  7. Thanks for the readable summary of issues, provision of actual numbers and links to some useful resources. I will use and share this post. I am just a bit surprised that your call for gov to fasttrack at least a preliminary Fees Commmission report doesn’t mention the one they have been sitting on for years… http://www.dhet.gov.za/SiteAssets/Fees%20Must%20Fall/287700266-Final-Draft-Report-of-the-Working-Group-on-Fee-Free.pdf

  8. This idea: “It would be a grant that converts into a loan if a student successfully completes their degree and starts earning a decent income” has one major issue and I know some papers from other parts of the world have touched on this. It would create an incentive to simply study as a gov backed holiday. Already the rates of completion are not good, we would effectively just sink fortunes into students who have no intention of completing their degree.

  9. Compelling! While there are celebrations about 70+% matric pass rate, the true story is that for a cohort learners starting in grade one the pass rate is 37%. There are two things of importance that I think should accompany this analysis : primary & secondary education will not be fixed by more money only; it needs to be managed properly – which means breaking the SADTU mafia; investing in compulsory teacher training programs and putting proper performance measurements in place. Infrastructure improvements & feeding programs should follow. On a tertiary level, low / no interest loans to poor students could be considered, it should only be an option once the tax waste on our bloated public sector and cabinet spending has been rectified; underperforming parastatals should not be funded (SAA!); the nuclear build programme be scrapped and that budget be allocated to assist students. Education is our future. http://city-press.news24.com/…/break-sadtus-power-20160514

  10. Compelling! While there are celebrations about 70+% matric pass rate, the true story is that for a cohort learners starting in grade one the pass rate is 37%. There are two things that I feel should accompany this analysis: primary & secondary education will not be fixed by more money only; it needs to be managed properly – which means breaking the SADTU mafia; investing in compulsory teacher training programs and putting proper performance measurements in place. Infrastructure improvements & feeding programs should follow. On a tertiary level, low / no interest loans to poor students could be considered, it should only be an option once the tax waste on our bloated public sector and cabinet spending has been rectified; underperforming parastatals should not be funded (SAA!); the nuclear build programme be scrapped and that budget be allocated to assist students. Education is our future. http://city-press.news24.com/…/break-sadtus-power-20160514

  11. The problems we are experiencing in education today has its genesis in the way it has been handled @ government level. Incoming Ministers want to be remembered fondly for their contributions to education. In so doing, more damage is being done re: OBE and now Blade who has lowered the Matric pass rate to 30% as well as the entrance criteria to Universities. This has simply raised the hopes of a band of mediocrity whose abilities may be better served elsewhere. Add to this the blight teacher unions have imposed in our schools (teachers not being accountable for what they do in the classrooms; absenteeism & malaise) and you have a dysfunctional system of education. Perhaps a good way for government to ROI on University students is to make it compulsory to pay a 100% diluted fee amount in the first year of study with passes earning fee remissions in the following years. This will certainly encourage higher achievement levels in the first year. Needy but deserving students can be subsidised fully.

  12. Nic this is great research, thank you. Is there anyway we can understand why there is such a gap in employment between white and black graduates without understanding what degrees they attained? This could be used to guide a lot of decisions and discussions from both a sponsor and student view point?

    • One should also consider which university the degrees is obtained at – I know for instance that the professional body of architects does not recognize the degree from certain universities – a low quality degree is like not having a degree at all.

  13. Something encouraging: Mbilwi secondary (ex-Venda school) is consistently a top performing maths & science school. With basic & functional infrastructure, their success comes from an exceptional headmaster & dedicated teachers that instilled a culture of learning & excellence. Kids often stay till late in the afternoon to study on their own time. This is a blueprint for success!

    https://vimeo.com/schoolsthatwork

  14. Ebrahim-Khalil Hassen

    Hi. Has anyone done a tracking study on what happens to poorer students once they enter universities. Are they excluded for financial reasons? Would be really important to understand this. Thanks for an incredibly useful summary of the evidence and ideas.

  15. Stuart Theobald

    Fascinating stuff. This piece I did is a year old, but think it remains relevant in terms of thinking through available funding options: http://www.rdm.co.za/politics/2015/10/22/how-to-fund-university-education-for-all

  16. Pingback: The economics of #FeesMustFall – eNCA | iExclusives

  17. I love the piece Nic. Some parts were poorly explained like the decile graph but I got the general idea. Thanks for the compilation. Looking forward to more of your work

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