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The funding crisis in South African higher education

February 22, 2021

Isfap Admin

Higher education funding of poor and “missing middle” (1) students remain a major crisis and challenge in South Africa. Just this last week we saw murmurings from student leadership that ominously reminded of the #FeesMustFall student-led protests that began in October 2015 in South Africa and continued into 2016, causing hundreds of millions of damages at South African university campuses and leading to a severe trust deficit between students, university leadership and the government. These protests culminated in the announcement by former President Jacob Zuma on 16 December 2017, ahead of the start of the ANC’s 54th national conference, that government would provide fee free higher education in 2018 for the first year students from the poor and working class with a combined household income of R350 000 per year (2).

On 11 February 2021 the University of the Witwatersrand (Wits) SRC president released a letter (3) saying that there are over 8 000 students who will not be returning to Wits for the 2021 academic year solely on the basis of finances. The SRC continued to launch a fundraising campaign “21 million in 2021” to support these at-risk students and ensure they are allowed to register and continue their academic path. Their efforts have to be commended.

On 19 February 2021 the University of Cape Town (UCT) SRC Treasurer General wrote:

”The university attempts to try and save face by agreeing to the abolishment of Academic exclusion in the 2021 academic year but remains resolute in the disruption of our futures through financial exclusion” (4).

She went on to say:

“The anti-black and anti-poor sentiments kept by the University seek to marginalize a certain group of students that are affected by external circumstances out of their control” (4).

The tension is palpable.

To make matters even worse, it surfaced that the National Student Financial Aid Scheme (NSFAS), a Government funded scheme that supports students with a household income of up to R350 000 per annum (post the Zuma December 2018 announcement), may very well be reviewing the list of qualifications they are funding and potentially excluding certain (so called lower need / demand) degrees and diplomas from funding. A circular from NSFAS published by Business Insider South Africa (www.businessinsider.co.za) on 20 February 2021, which, according to the article was confirmed to be authentic by a NSFAS representative, informed universities that first time entrants (FTEN) will not be funded for B Cur (nursing) or B Ed (teacher) qualifications, amongst other qualifications in the list (5).

All of this in an environment of rising levels of youth unemployment in South Africa. In Stats SA’s September 2020 Quarterly Labour Force Survey (Quarter 3: 2020) released on 12 November 2020, it reported that South Africa boasts 10.3 million unemployed young people aged 15 - 24 years, of which 31.9% were not in employment, education, or training (NEET). If one expands the age bracket to young persons aged 15 - 34 years, a staggering 43% of those youths are NEET, with female youths being the worst affected at a heart-breaking 46.1% (6). Unfortunately, with the impact of the COVID-19 pandemic, one can only assume these numbers will get worse before they get better.

With overall unemployment for the same period at 30.8%, compared to graduate unemployment at 8.9%, there is a clear need to create more graduates who are work-place ready, can advance in the job market and contribute economically (7).

This is leaving many young and ambitious young South Africans in a desperate situation where they have dreams and aspirations to improve their qualifications and future prospects through higher education, but they have simply nowhere to turn to for funding, and unable to fund this from their family or own resources. The uncertainty and changing goal posts also makes for a very stressful experience during a time that should be filled with excitement of beginning this new journey of self-improvement. Is it a dream denied, a promise broken?  Is the dream of fee free education still alive, and is the promise made by then President Zuma being honoured?

But the problem unfortunately does not stop there…then we also have the missing middle group of students. They are students that do not meet the criteria for poor and working class (the threshold of R350 000 combined household income per year as set out by then President Zuma). They do not receive support from NSFAS and they also are considered too poor to afford higher education from their combined household income of greater than R350 000 but less than R600 000. 

One thing that is sure – in a time of high levels of public and private sector corruption, amidst a pandemic and declining economy, resources are awfully scarce and there needs to be a clear focus on “value for money” when it comes to spend and investment on higher education. There are many aspects to this, but in an environment of scarcity one wants to direct resources to where it will be making the biggest impact and yield the best results.

Firstly: so much money gets wasted by students spending more time than necessary to complete their degrees. It is not just about funding; it is about providing a support ecosystem that will ensure that students succeed in record time (8).

Secondly: we need to focus on scarce skills. Skills that will result in gainful employment, or even better, result in entrepreneurs that create jobs, at the end of the study period. Skills that will make a real impact on the economic success of South Africa in future.

Thirdly: those that can afford to pay for their own studies must do so. There has to be a means test associated to all bursaries and funding provided to students, in addition to the normal academic and other qualifying and selection criteria. In an environment of immense scarcity, we simply cannot have a situation where a student from a wealthy family, because of excellent academic performance, gets a scholarship to study, at the cost of a poor or missing middle student.

Lastly: universities need to cut out the fat and restrict fee increases. Just this year we once again saw university fee increases outstrip inflation at a 4.7% increase for tuition and a 6.7% increase for accommodation (9). These kinds of increases are simply not sustainable for students and funders alike.

In conclusion, solving the higher education funding crisis in South Africa is everybody’s business. We cannot afford another #FeesMustFall with its devastating impact on infrastructure and diminishing levels of trust. We need to initiate dialogue amongst stakeholders that will endevour to find long lasting and sustainable solutions to the challenges.

Written by Morné du Toit, Chief Operating Officer, The Ikusasa Student Financial Aid Programme Foundation NPC (ISFAP)

Who is ISFAP?

In 2016, and in response to the #feesmustfall movement and the resultant cry for free education, the Minister of Higher Education and Training established a Ministerial Task Team to investigate alternative operating and funding models within the higher education sector. The Task Team’s work culminated in the formation of the Ikusasa Student Financial Aid Programme (ISFAP), a programme that would mobilise both private and public sector funds to support missing middle students with their dream of becoming graduates.

A pilot was launched in 2017 with 691 first-year students, five universities and 14 critical skills qualifications. The main aim of the programme was not only to support students from the missing middle financially (tuition, accommodation, transport, meals, books, laptop, and cash allowance), but also to provide a support structure that would enable these students to complete their studies successfully, thereby reducing drop-out rates. This support offered by ISFAP, generally referred to as “wrap-around support”, includes life skills, mentoring, medical and psychosocial support, additional academic support, and social support.

To date, ISFAP has secured over R850 million towards the programme and funded over 2 000 students across 11 public universities in South Africa. We are proud to reveal that our students achieve an average year-on-year progression rate of 88%, and even prouder to note that 9% of our student population has graduated in record time for their various qualifications, with many more expected to follow, as those who studying a four-year university qualification from our initial 2017 cohort enter their final year of study this year.

These students are studying degrees that will ultimately lead to filling South Africa’s critical shortage of medical doctors, nurses, pharmacists, engineers, actuaries, chartered accountants, occupational therapists, physiotherapists, prosthetists, computer network engineers and data scientists, scientists and other 4th industrial revolution related careers. As funding expands, the list of qualifications and partner universities ISFAP caters for will also be expanded based on funders’ requirements, provided that they align to ISFAP’s strategic intent of securing the future of South African youth and ensuring their meaningful participation in the growth of South African economy.

YOU can be part of the solution

To support the country’s missing middle, ISFAP raises funds primarily from corporate and government entities as part of their Corporate Social Investment (CSI) programmes, Black Economic Empowerment (BEE) initiatives and tax planning efforts. In 2019, the ISFAP Foundation NPC was registered, with registration as a Public Benefit Organisation in terms of the Income Tax Act flowing shortly thereafter. This means that donations made to the Foundation are tax deductible by the donors (S18A) and exempt from donations tax.

ISFAP also engaged with the Department of Trade and Industry to gazette the Broad-Based Black Economic Empowerment (B-BBEE) Code 300 that was recommended by the Ministerial Task Team. Final gazetting of Code 300 was done in November 2019. These revised B-BBEE codes mean that corporates are allowed to receive 4 points on an attributable spend of 2.5% of their leviable payroll spend if they contribute to bursaries for black students at all Higher Education Institutions.

The COVID-19 pandemic has, like most other areas of the economy, also impacted ISFAP’s funding, and for 2021 a smaller intake of bursary students will be funded due to the reduction in funding received. Hopefully, this is only temporary and ISFAP will continue to grow in years to come to support the growing need of the over 250 000 youths who are estimated to form the missing middle.

ISFAP is constantly looking to partner with new funders, corporates, foundations and charities, the government sector, international donor agencies and other philanthropic bodies to increase funding to be able to support more students. To become part of the solution to tackle the missing middle pandemic, please contact partners@isfap.co.za or sperrier@isfap.co.za.


  1. The “missing middle” refers to those students who are too poor to afford higher education, yet not poor enough to qualify for funding through the National Student Financial Aid Scheme (NSFAS), a Government funded scheme that supports students with a household income of up to R350 000 per annum. These missing middle students typically fall into an annual household income bracket of greater than R350 000 but less than R600 000 and is widely considered as falling into a funding gap where they cannot afford to pay for university studies themselves, but they also do not qualify for “free” education through the NSFAS mechanism.
  2. https://www.news24.com/citypress/news/zumas-promise-of-fee-free-higher-education-and-its-rocky-start-20181226
  3. https://twitter.com/Wits_SRC?s=20
  4. https://twitter.com/UCT_SRC/
  5. https://www.businessinsider.co.za/nsfas-funding-and-applications-for-2021-qualifications-2021-2
  6. Publication | Statistics South Africa (statssa.gov.za)
  7. Unfortunately, at the time of writing, only the 3rd quarter 2020 statistics were available. The 4th quarter statistics are expected to be released on 23 February 2020.
  8. https://twitter.com/ISFAP_ZA/status/1230541245962956803?s=20
  9. https://www.dailymaverick.co.za/article/2021-01-17-university-fee-hikes-a-gremlin-for-students-in-the-missing-middle/
ISFAP - the Ikusasa Student Financial Aid Programme - was established to assist poor and 'missing' middle income university students in selected fields of study to afford the university fees by means of providing financial aid provided the candidate meets certain prescribed requirements.
©  Ikusasa Student Financial Aid Programme Foundation NPC

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