FEES MUST FALL

What if Fees Fall?

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Jacob Zuma, in his death throes as leader of the ANC, committed his party to providing free tertiary education for the poor. While not universally free education, as many protesters hoped, Zuma’s plan was to provide free education to any student with a combined household income of R350 000 or less a year. Despite this not being the entire school leaving public, this reportedly accounts for 90% of students in the system.

To accomplish this, the system will be phased in over 5 years, starting with first years in 2018 and funded by increased subsidies.

Zuma’s decision completely disregards the view of the Heher Commission, which reported that South Africa cannot afford such a decision. It will cost the country between R15bn to R50bn a year to maintain. This will just add to our already severe deficit. In an effort to fund the project, government will either have to drastically raise taxes, implement austerity measures, redirect spending or increase borrowing. None of these are welcome options, or even politically possible in some cases.

Gigaba is to announce the source of funding in his budget speech, but he can’t plausibly present anything substantive. There simply isn’t enough money, short of pillaging the rich completely to pay for only a year of costs. As our financial situation deteriorates, other funding avenues such as borrowing will close on us.

ANC leader, Cyril Ramaphosa, has noted his party’s commitment to free higher education. Politically, he doesn’t have much choice if he wants to remain in the good graces of the left-wing faction of the ANC and the protesters who continue to be vocal every year on campus.

Now, in 2018, it seems that the government is misguidedly committed to implementing free tertiary education. While the government could pull a fast one on the populace and either “phase it in” over a period of never, or just pretend they never promised it, this article will assume that the national government and universities do attempt to implement free education at the university.

With all current observable factors, the state and universities will fail to implement free tertiary education – especially with increasing calls by political troublemakers for non-qualifying students to just walk into registration at university and not take no for an answer.

Despite this, the current political climate suggests that the powers that be will go through with it and attempt to implement the planned policy – as unplanned as it is. This article will be speculating on how this will affect the fiscus, the protests, the universities, private education and the state of education as a whole.

The Fiscus

Fiscally, South Africa is in dire straits. Declining tax income, rising government spending and multiple drains on the fiscus have left SA close to financial ruin. Providing free education as planned will place even more strain on the education budget, which is already one of the largest education budgets proportionately in the world.

As it stands, the state’s only source of income besides drastically changing government policy would be to borrow the money from foreign creditors. This will continue to devalue our economy and will eventually be closed to us, sinking us into a financial crisis similar to that of Greece a few years ago.

If the state proceeds as planned, they will need to find other ways of finding the cash.

The first is raising taxes. With an already angry and reluctant taxpayer base, this is not really a viable option. Rising taxes will continue to strangle the economy, if they are paid at all. Rather, the state should be focusing on facilitating economic growth so that there become more tax payers – but this is not a quick fix. Unfortunately, raising taxes will probably not be enough, as more and more tax payers will start refusing to pay the exorbitant rates and, those that do, will just be propping up a collapsing system.

The other option, and much more economically viable, is to redirect public spending. The South African government wastes a great deal of the budget on failing parastatals, vanity projects, corruption and other financial sinkholes. Redirecting money from those projects may provide for at least some of the costs of free education.

But spending cuts are politically dangerous. As Milton Friedman said: “Nothing is so permanent as a temporary government program.”

Simply, politicians and stakeholders don’t want to lose the projects that make them their money and ensure their power. Thus, any move to defund failing state projects like the parastatals and incompetent departments will be met with strong opposition.

Fiscally, there is no easy way to fund free education and any attempt to do so will probably lead to an economic crisis.

The Protests

People are losing faith in universities due to the voracious and disruptive protests that have wracked them since 2015. I, for one, never experienced a year of study without major disruptions. Degree requirements have been cut down to allow for graduation, lecture quality has taken a hit and students are uncertain every year that they will be able to complete their degrees.

The call for free education is in response to the demands of these protests. The intent, besides Zuma attempting to gain political brownie points, is appeasement. But this view is based on a very limited understanding of the protests.

The protests began in 2015 with the vandalism of the Rhodes statue at UCT. It had nothing to do with fees. Rather, it was founded on the ideology of deconstructing the university completely. This is called “Decolonisation”, a catch-all ideological term used to oppose anything that pundits don’t like at a given time.

For those who observe the protesters properly, and not just based on a shallow reading of the media, they will find that fees make up a very small aspect of protester’s demands. In fact, every year the main cause changes from campus to campus. At UCT, 2016 saw a fictitious accommodation shortage take the limelight. 2017 saw attacks against the fast-food outlets on campus.

There is no united vision among the protest movement calling for free education. That is just the popular cause that allowed it to explode at the end of 2015. Rather, the protests are based purely on ideology, a desire to protest for its own sake, and simple politicking for partisan positions upon graduation.

As such, the protests will continue in 2018, and continue the decline of the universities. Decolonisation has no limits and rather than appeasing the protesters, free education will embolden them into believing that their tactics can work to get whatever they want.

Free education or not, the protests will continue to wreck tertiary education.

University

Universities will face another torrid year in 2018, as they bear the brunt of the state’s promises. Re-invigorated by having their demands, at least, acknowledged by the government, protesters will doubtless renew their fervour. This will result in a harsher decolonisation campaign, further infringing on academic freedom, while continuing to chase away many skilled academics out of the country or towards the private sector.

This trend has been seen since the start of the protest movements in 2015 and won’t stop now. If anything, the lack of a consistent plan by the state to implement their policies will chase off intelligent academics to greener pastures. Students who have the option will also look for better opportunities, furthering the decline of our universities.

Private Sector

The only people who stand to gain from the likely events of 2018 are political malcontents who feed off the angst of the protesters and the private sector. Unless otherwise regulated, as officials such as Blade Nzimande have suggested is a possibility, the private sector stands to gain the most out of free education and the impending collapse of public sector education.

Von Biljon of Business Partners Limited argues that the private sector will fill the gap where the public sector is failing. This has already been seen in the primary education sector, where private schools like Spark are providing primary education cheaper than public schools.

Education franchises like Curro are continuing to grow in leaps and bounds. Much of Curro’s growth was during 2016 and 2017, where they grew to over 47 000 students by January 2017. This timeframe correlates with the protests and calls for free education. One can infer from this that frustration with the state of public sector education is directly benefitting the private sector.

Private education is growing unabated due to the collapse of public sector education. Private providers are equipped with the ability to secure their properties against trespassers and cater their curriculum to the consumer. Over and above that, the private sector’s relative independence from government makes it a much more viable option to an increasing number of people – as the state progressively proves that it struggles to handle any task it undertakes.

The private sector will further benefit from the brain drain of public sector academics, who will find greener pastures overseas or in private alternatives. While the public universities used to brag about their illustrious academics, the tides will turn as these intellectuals change their allegiance.

If fees fall, the public sector will collapse and the private sector will be there to pick up the pieces. They are, to be a bit dramatic, our last hope.

What if free education does work?

But, what if the state magically finds some way of funding free education? Budget restraints aren’t the only reason to be afraid. I have already spoken about the decolonisation movement; that is probably the prime reason that public sector education is collapsing. Free education brings a direr factor to the table: an education bubble.

South Africa is a developing country that pretends to be developed. Rather than focus on developing our industry, students are encouraged to become scholars that cannot contribute to industry or the economy.

It is an oft-heard story to hear about a civil engineer graduate standing on the side of the road begging for a job. There simply aren’t enough formal sector jobs in South Africa to support the population of graduates.

It is a common refrain by free education advocates that the policy will be a boon for the economy. Not at all! If anything, even if the budget is found, free education will send negative signals to students about what they should be studying and pursuing as career options. When we incentivise students to become engineers, we don’t get enough technicians. When we subsidise the humanities, we don’t get enough genuine entrepreneurs.

We simply don’t need so many scholars. When we are getting engineers, we should be getting welders. When we are getting lawyers, we should be getting clerks and cops.

There is a grave misunderstanding of how employment works in this country. A degree doesn’t get you a job – demand for your skills does. And there simply isn’t enough demand for many, especially humanities degrees, in this country.

This problem is not new. Eskom, all the way back in the 1980s, reported that South Africans had an unhealthy obsession with formal degrees, rather than technical skills that are actually needed to uplift the economy and have a better chance of getting them a job.

Free education, alongside inclusive entry to varsities, will lead to too many students wasting time on degrees they think will guarantee them a job. Rather, the influx of new graduates into the job market will devalue the degree to the point where studying it becomes borderline worthless.

The education bubble will pop when university graduates realise they have wasted years of their lives basically playing around.

If we were serious about building up this nation’s economy, we would be focusing on economic growth. This means deregulation, upliftment of the rule of law, upgrading law enforcement and promoting skilled workers rather than skilled scholars.

Economics is the art of distributing scarce resources. University education is scarce. There aren’t infinite lecturers, and boundless lecture theatres. Moreover, the value of many degrees is founded on the low supply of its holders. If too many people get a degree, the degree becomes worthless. But it won’t even get to that point – because there simply are not enough lecturers, staff and infrastructure to facilitate such a policy.

Countries that do have free education balance it out with high standards. Brazil’s public universities, free to any that qualify, are so stringent that only the top-performing students in the country can attend. The majority are relegated to private institutions.

The irony of such a policy is that the top-performers are predominantly from rich families that could afford private tutors and decent schools.

Free education rhetoric in South Africa wants to combine fees falling with inclusive standards. But all this will accomplish is a waste of resources. There are limited spaces at universities for reasons that cannot be circumvented by ideology or wishful thinking. This means that a system needs to manage the scarcity of these places.

In Brazil, only the elites can qualify for free education – defeating the purpose that South African advocates intend by the policy. In Germany, free education has resulted in universities being stretched too thin. University administrators and academics lament that without fees, they cannot control the influx of tuitions and are deprived of an important source of revenue needed to upgrade facilities and keep themselves afloat.

We are often enamoured with the social democratic European states and their welfare systems, forgetting that they got to that point through a flourishing free market and responsible investing for hundreds of years, but it isn’t so flourishing up there.

Free education doesn’t breed a culture of just deserts. It breeds apathy and entitlement, where many students don’t need to care about their studies because they can just keep re-applying the next year. It gives them license to party for years, suckling off welfare. It must be nice, and a small part of me can’t blame these students who want to party throughout their good years.

But that is not the way the world works or should work.

University exists to expand the bounds of human knowledge: to celebrate human achievement and civilisation, and then push it forward further than we can ever imagine.

It isn’t about giving free class time to the undeserving. If someone deserves to be studying, there are ways. Scholarships are extremely prevalent. Crowdfunding has put many deserving people into positions where they can achieve their dreams.

Free education isn’t a way to empower the deserving student to push society forward. It is a way of bastardising our institutions by allowing the apathetic and undriven free passage into our illustrious halls of learning.

If fees fall, the only winner will be the private sector, who will become the new bastion of human knowledge. Universities will be drained of their intelligent academics. Students will waste their time on increasingly devaluing degrees. The bubble will pop, and universities in South Africa will not even be a shadow of their former glory.

If fees fall, so will the universities.

But hey, at least they’ll be free!

Nicholas Woode- Smith

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