Government will spend R57 billion on free higher education over the next three years, Finance Minister Malusi Gigaba said on Wednesday.
Tabling the 2018 Budget in Parliament, Minister Gigaba said there was a reallocation in the spending framework.
“The largest reallocation of resources towards government’s priorities was on higher education and training, amounting to additional funding of R57 billion over the medium term.
As a result, this is the fastest-growing spending category, with an annual average growth of 13.7%,” said the Minister.
The announcement comes as former President Jacob Zuma in December 2017 announced the introduction of free higher education for the poor.
On Wednesday, Minister Gigaba said government is proud to implement steps that will lead to guaranteed access to higher education and training for all South Africans who qualify based on merit, not class position.
Government will phase in fee-free higher education and training to students from poor and working-class families.
This means that all new first-year students with a family income below R350 000 per annum at universities and TVET colleges in the 2018 academic year will be funded for the full cost of study. This then will be rolled out in subsequent years until all years of study are covered.
Meanwhile, returning National Student Financial Aid Scheme (NSFAS) students at university will have their loans for 2018 onwards converted to a bursary.
“This is an important step forward in breaking the cycle of poverty and confronting youth unemployment, as labour statistics show that unemployment is lowest for tertiary graduates.
Higher and further education and training is being made accessible to the children of workers and the poor,” said the Minister.
Delivering his first State of the Nation Address (SONA) last Friday, President Cyril Ramaphosa said Minister Gigaba would give further details of free higher education in terms of its financing.
President Ramaphosa said the investment in higher education is expected to contribute to greater economic growth, the reduction of poverty and inequality while also enhancing earnings and increasing the competitiveness of the economy.
According to the Budget Review, an additional allocation to the NSFAS will cover the full cost of study for undergraduate university and technical vocational education and training (TVET) college students from families with annual household incomes below R350 000.
This includes tuition fees, prescribed study material, meals, and a certain level of accommodation and/or travel allowances.
However in 2018, the bursary will apply only to students in their first year of study. More than 340 000 students at universities and over 420 000 full-time equivalent students at TVET colleges will be funded through this new bursary scheme in the 2018 academic year.
In 2019, the arrangement will expand to cover first- and second-year students.
Meanwhile, returning NSFAS students from families with household incomes below R122 000 per year in their second, third or fourth year of university study in the 2018 academic year will also be supported.
These students will have their loans converted into bursaries under the same conditions as when they first received the financial support. This excludes TVET college students supported by NSFAS, who have always received bursaries, not loans.
NSFAS will also receive an additional R105 million over the MTEF period to cater for the additional administration costs of the expanded bursary scheme.
Subsidies to universities will increase by R11.3 billion over the MTEF period. This amount covers an 8% increase in tuition fees for students from families with household incomes of between R350 000 and R600 000 a year.
“Qualifying students will pay the tuition fee set in 2015, because government has absorbed the increases for the 2016, 2017 and 2018 academic years. The subsidy amount includes a general increase to cover university operating costs,” according to the Budget Review.
Higher subsidies for TVET colleges will cover 80% of the cost of providing programmes by 2022/23, from the current level of 54% of total programme cost.
Baseline funding of R4.4 billion for TVET infrastructure over the medium term will support refurbishment of existing campuses, and the purchase of workshop equipment and maintenance.
Meanwhile, policy decisions concerning issues such as historic debt, adjustment of the family income threshold, interventions to decrease dropout rates and the construction of student housing will be taken in due course. These decisions could raise the cost of the programme significantly, it noted.
The 2018 Budget has allocated R351.1 billion for learning and culture.