The University of the Witwatersrand is heading for its first deficit in more than 11 years as its council faces a standoff with the government over the registration of students with ballooning historic debt.
Vice-chancellor Adam Habib said the institution was owed more than R405m. Of this amount, students owed R208m, the National Student Financial Aid Scheme (NSFAS) owed R67m and donors who defaulted on pledges owed R46m at the end of last year.
The institution’s costs had also risen after it started taking contract staff in-house, with operational costs running up to about R300m a month.
A trend of nonpayment had appeared among those who could and could not afford to pay university fees, Habib said.
Other universities such as Stellenbosch and University of Cape Town (UCT) had healthy surpluses at the end of 2015. It is still to be seen if this trend has affected them too.
Habib said the government had asked universities to let those with historic debt register and enter into a payment plan with students.
He said he objected to this, citing the move as illegal. The Credit Act stipulated that loans could not be given to people who could not afford to pay them back, he added.
Previously, student debt accumulated during the year had to be paid off before registration in the following year.
But last year, Wits reached an agreement with the state to settle debt owed by NSFAS-funded students, allowing them to register. New students not funded by NSFAS could register without paying the registration fee after signing a form stating they could not pay.
But no agreement was reached with existing students who already owed the institution. "We think we resolved, at least temporarily, the registration issue. The outstanding issue is the historic debt," he said.
Habib says he would be neglecting his fiduciary duties if he did not ensure the university was financially sustainable
But Wits Progressive Youth Alliance (PYA) chairman Mpendulo Mfeka said Wits had used acknowledgement of debt (AOD) forms before to allow students in arrears on their fees to register.
"Last year we encountered Habib trying to close ranks on it," he said. "The fee waiver was introduced to say fees could be waived so students can register, and as the year goes on they find plans to try to cover the debt.
"For example, NSFAS has not responded to students on whether they have received funds or not, so those who were on NSFAS and need to register do not have money to pay registration or tuition," Mfeka said.
He said the PYA-led student representative council pushed for the registration fee waiver to include first year students this year, so they could register until NSFAS responded to their financial aid applications.
"Habib is trying to close the gate on poor black people who can’t afford and they are the ones who need to sign the AOD," said Mfeka. "They have tried to exclude black bodies in many ways. Once we have more whites, movements like #FeesMustFall get suppressed because those people don’t identify with the struggle. When we say fees must fall we are also talking to racialism in the university. Also, R9,000 for registration is financial lynching."
But Habib said he would be neglecting his fiduciary duties if he did not ensure the university was financially sustainable.
"Whether I like it or not, if government doesn’t pay [more in state subsidies] or the students don’t, something has to balance it out."
This could be in the form of higher fees, which rose 8% this year as a result of inflation and currency fluctuations.
New York’s governor Andrew Cuomo recently put forward a proposal that public universities’ tuition fees for residents earning $125,000 or less be free, but the government would have to pay.
This "system-wide" problem threatened to implode into a financial crisis if it was not addressed, and Habib said this was not being done. "We tried to explain [the issues] and it seems we did not succeed. The [various] role players are not playing the roles they are supposed to be playing."
Wits has previously enjoyed surpluses as high as R145.4m on its total budget — which includes linked entities such as the Wits University Donald Gordon Medical Centre; but its council budget registered losses of at least R9m for the 2016 financial year.
Habib said they could cut the cost structure by removing some programmes but the quality of education would decline.
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