New fee capping framework sparks debate over higher education sustainability

A newly proposed Draft Fee Regulation Framework for South African universities, released on 1 November 2024, by the Department of Higher Education and Training (DHET) has sparked a debate over its feasibility and potential impact on the long-term sustainability of the sector. Developed by a team of retired vice-chancellors, the Framework came about as a result of the government exploring the possibility of putting a limit to fee increases for universities. 

The idea is that on an annual basis, through a fee compact, there’s a level beyond which a university cannot increase its tuition fees for local undergraduate students. 

The Framework aims to address variations in fees charged for the same qualification across institutions, reduce student debt, and improve accessibility to higher education. However, Dr Matutu emphasised that enforcing such fee caps could exacerbate existing financial pressures on universities. Drawing from international benchmarks, she noted that similar policies implemented abroad have shown mixed results.

“Countries like the UK, for example, introduce fee regulation for local students such that there’d be no fee increase for a set number of years. The consequence of that was that the local students were able to access higher education, which is what was intended. However, the universities were becoming financially unsustainable,” she said. 

While the UK mitigated this by charging international students significantly higher fees, Dr Matutu pointed out that South African universities don’t have the capacity to replicate this approach.

The proposed Fee Regulation Framework also raises critical questions about governance in the higher education sector. Under the Higher Education Act, university councils retain autonomy in setting tuition fees. This legal safeguard complicates any attempt to formalise the framework into policy. Therefore, the DHET  has, Instead, opted to use the Framework as a guideline or a fee compact.

This approach, however, has not been without issues. Dr Matutu highlighted how the fee compact is already enforced in practice for NSFAS-funded students, who account for over 60% of the undergraduate population. This leaves universities with limited flexibility to adjust fees for the remaining 40% of students, further straining their financial sustainability. 

“The only difference is that universities who went beyond that guideline in the fee increases could only get that from about 40% of the student body and not the NSFAS-funded students. That is a recipe for unrest,” she cautioned.

She added that universities are increasingly becoming financially unsustainable, having to fork out the shortfalls in revenue that can’t be generated through fees across the board.

Infrastructure funding also remains a critical point of contention, particularly for historically disadvantaged institutions and universities of technology. Dr Matutu revealed that slow spending of grants by these institutions often leads to funds being redirected by the National Treasury. 

“The universities that tend to be well-equipped to spend this money are those historically white universities and a few historically black universities and universities of technology,” she noted. This disparity has left many institutions unable to fully utilise allocated funds, further widening the gap between well-resourced and under-resourced universities.

Another contentious issue Dr Matutu highlighted was the NSFAS-imposed cap on student accommodation fees. She said despite repeated requests, the study underpinning this decision has not been made available to universities. 

“Apparently, there was a study done by the International Finance Corporation that the government worked with, whose results have not been released. So, we don’t know what led to this level of capping,” she said. The cap has disproportionately affected rural universities, which often lack affordable housing options for students. 

Dr Matutu described the unsustainable ripple effects this policy has created, as it has forced students to pay more for the accommodation funding shortfall: “Some deans keep tinned food stock in their offices for students to survive… that unsustainability harboured by NSFAS is being transferred to universities.”

Delays in funding disbursements from Sector Education and Training Authorities (SETAs) have further compounded financial difficulties for universities. Dr Matutu detailed how the lengthy verification process required before the SETAs can release funds often leads to prolonged delays. 

“This has been the biggest hurdle [between one SETA and USAf] because the SETA doesn’t have the capacity to do this data verification on time,” she said, adding that funds promised from as far back as 2020 remain unpaid. The USAf CEO said these delays not only disrupt universities’ financial planning but also damage their reputations among students who are promised bursaries that fail to materialise.

Dr Matutu called for innovative approaches to mitigate the financial pressures facing the sector. She suggested that universities consider shared services to reduce costs and improve efficiencies. She also urged the government to ensure that any funding policies implemented be evidence-based, particularly in light of the significant gaps in data surrounding student accommodation and fee capping decisions.

Following Dr Matutu’s address, the EDF attendees raised concerns about how funding delays already creating bottle necks in the system leave 2025 bursary applicants vulnerable as previous year’s bursaries are yet to be disbursed.

In relation to the SETA delays, it was pointed out that procurement regulations that were introduced to curb fruitless expenditure have become prohibitive, leading to many of the bottlenecks in the system. 

Dr Moloi described how weak education outcomes in basic education are likely to affect the quality of students who get admitted into teacher education and training at the post-school level. “Education faculties often find themselves compelled to admit students who may not necessarily meet their admission criteria because achievement in schools is low … and now there’s research showing that this poor performance is creeping into universities (Abrahams & Lomofsky, 2020). 

“What we also know is that in the schooling system itself, performance in key subjects like maths and language – which matter most in primary school level –is also generally low.  If we’re going to improve standards, that needs to be done by improving teacher education and teacher standards, because teachers are key to improving the quality of education.” Dr Moloi reported that the PrimTEd Community of Practice (CoP) is extending the PrimTEd work to include African languages. To that end, they are already putting together Language and Literacy standards for teaching that promote mother-tongue-based multilingual pedagogies.

She used this script to reiterate the call for improved standards of teacher education.  

Maje also reminded the deans of legislative developments with implications on student teachers’ employability within the education sector. She highlighted that recent amendments to the Basic Education Laws Amendment (BELA) Bill have led to an expanded definition of corporal punishment, which now also includes “any acts which seek to belittle, humiliate, threaten, induce fear or ridicule the dignity and person of a learner”. She said teacher students need to be alerted of these changes so that they can be aware of what now constitutes a dismissible offence.

“We also need to vet the students (to establish if they have criminal records) … because we need to know if they can stand in front of our learners, who, by law, are classified as vulnerable people,” she said. 

In the face of mounting challenges, including the proposed fee regulation framework, systemic inefficiencies in grant disbursements, and concerns over student readiness in teacher education, members of the Education Deans Forum called for decisive, evidence-based action, and highlighted that the sector must navigate a delicate balance between accessibility, sustainability and quality education.

Nontobeko Mtshali is a contracted writer for Universities South Africa.