For more than a decade, South Africa’s public universities have been making a clear, evidence-based case to government: running a university is very different from running a household.

Early reports dating back to 2014 already showed that universities’ spending patterns differ fundamentally from those of households. While families spend heavily on goods, universities’ highest costs are staff salaries, professional services, and operational infrastructure.

Against this background, the then Higher Education South Africa, now USAf, realised that traditional measures of inflation, such as the Consumer Price Index (CPI), consistently underestimate the true cost pressures universities face. This led to the development of the Higher Education Price Index (HEPI), a tool designed to demonstrate the real drivers of university spending, from salaries and outsourced services to campus maintenance and student support. HEPI reports from 2014 have consistently revealed that costs rise faster than CPI, highlighting the financial strain on institutions and the inadequacy of the state subsidies and modest fee increases.

The research has gone far beyond simple accounting. By collecting detailed expenditure data from nearly all public universities and comparing it to international benchmarks, the sector created complementary indices — the Higher Education Volume Index (HEVI) and the Higher Education Budget Index (HEBI) — that show not just price growth, but the total resources needed to maintain quality education as student numbers rise.

Staff costs alone account for more than half of total spending, while residences, services, and infrastructure add further pressure. The 2014 report already indicated this structural reality: universities face sustained, above-CPI inflation that requires targeted policy responses.

This decade-long effort has also translated into policy influence. Through workshops, expert panels, and ministerial engagement, universities have gradually persuaded the government to take HEPI seriously, using it alongside CPI to guide fee increases and state funding allocations. Beyond the numbers, this research tells a human story: of institutions trying to remain sustainable while keeping education accessible, of families stretched to pay fees, and of students navigating debt and uncertainty.

The message is clear: universities operate in a financial reality of their own. Recognising this is essential to sustaining the mere existence of our institutions, as well as student access, the quality of programmes and scholars, and equity in South Africa’s higher education system.