Last week may have confirmed for university administrators, students, indebted parents and many in the private sector what they may have always suspected; there is no credible plan for free education.
Once again, another conference resolution, or set of recommendations, seems set to be put in a folder and returned to the dusty pile until the next round of protests.
Multiple dramas are unfolding. It seems a parallel free education plan is being hatched by President Jacob Zuma, which news reports suggest prompted Michael Sachs, the budget czar in the Treasury, to resign.
The report came up with a mixed bag of suggestions, some progressive and some clearly out of touch with the economic and social reality of SA. The scrapping of registration fees is one of few progressive suggestions. The rest include the introduction of a two-tier financing system for education based on fully subsidised access to the Technical Vocational Education and Training sector and debt-based provisioning in the university sector.
This proposal is akin to a risky one-night stand with a mashonisa (loan shark), to fund a venture the payoff of which is not related to the underlying performance of the asset acquired (education), but other external factors (the performance of the economy or the absorptive capacity of the labour market).
Even with the highest marks some graduates remain unemployed.
The effect of the proposed income contingent loan will not only be felt by the already indebted households from which university students come, but also the macroeconomy, through upward pressure on the contingent liabilities that keep Finance Minister Malusi Gigaba up at night.
Another chapter in the continuing tale of what the Public Affairs Research Institute referred to as a "contract state", built on the ability to manage private sector capacities through outsourcing of key functions.
Moreover, the policy is inherently regressive: the children of those who can afford to pay don’t necessarily pay the true cost (subsidies still constitute about 40% of universities’ income), but the poor leave the system trapped by costs of that education, alongside socioeconomic challenges such as the "black tax".
It suggests an insensitivity to the trade-offs that confront black graduates and their social milieu.
What scholar Phindile Kunene referred to as the "hard choices that young men and women make, between repaying this debt and extending an RDP house. Or building a house to rescue their siblings from sleeping on the kitchen floor, bathing in a bucket and studying on
their laps".
It’s a big gamble. The bet is on the economy picking up at some point and absorbing the students, which is naïve. The problems of the economy are structural and not sensitive to economic boom-bust cycles.
Yet the commission still believes that returns to higher education are individualised in the form of better paying jobs and opportunities for upward social mobility.
The commission’s rationale for this bet was a submission by the Nelson Mandela Metropolitan University of the findings of research in a World Bank working paper. The research suggested that private returns to higher education were the highest in SA (in sub-Saharan Africa) due to the shortage of high-level skills. The sequence of the logic of that argument and its premise are revealing; the societal concern (shortage of skills) that the free education intervention confronts, among other concerns, is then framed as the reason for private returns outstripping societal returns and why private households must pay.
A regression is run with incomparable data sets and "stylised" facts emerge that even the authors concede "may not be strictly comparable". Those beneficiaries who are fortunate enough to access the scarce skills pay for them from incomes that we have no certainty will materialise.
Aside from a suggested cap on increments, the report was quite skimpy in its scrutiny of university administrations. Little wonder, then, that it is likely to be marked on the spine, closed in its bound copy and placed on the shelf next to all the other dusty resolutions and recommendations.
• Cawe (@aycawe), a development economist, sat on the national minimum wage advisory panel.
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