UCT and transformation part five: fees and finances

Read part one, part two, part three, and part four.

Zizipho Pae is in her fourth and final year of her commerce degree at UCT. Last year she received the most votes in the Student Representative Council (SRC) elections, and she was one of the leading voices in the Rhodes Must Fall campaign.

The story of how she has managed to fund her university studies is too long to tell in full here, but a few details convey some of the stress students face: Pae comes from a home with limited means. She received a corporate scholarship for her first two years. But at the end of her second year her “marks took a bit of a dip” and she didn’t get the 60% average necessary to continue getting her scholarship for her third year.

Since it only became clear in February last year that she would not be able to renew her scholarship, she wasn’t able to apply in time for financial aid from the university. So she considered taking a break from UCT or going to a different university. Fortunately, the SRC managed to find funding for her at the last moment. Her grades picked up and she got financial aid again this year, including a loan that she will have to repay after she graduates.

Pae says others, including middle-class students, also struggle to pay their fees. A friend’s mother earns R400,000 a year, but has three children to get through university. When she couldn’t pay the fees on time and had to take out a loan, Pae’s friend lost her place in residence.

Some of Pae’s friends have had to leave university for a year, while they try to find the means to pay their tuition.

“UCT is doing a lot [to help students cover fees] but more can be done.” She tells how a university official was unmoved by the pleas of a retired father from Kwazulu-Natal who asked if he could have two extra weeks to cover his child’s residence fees.

Tasneem Salasa is UCT’s student financial aid manager. “All people who apply for admission and for financial aid, and get an academic offer, will be assisted [financially] if they meet the eligibility criteria,” she says. “[UCT] never excludes you during the middle of the year. You can stay here the whole year, have the whole year’s debt, write all your exams, but then you cannot register in the next year,” she explains. Students also don’t graduate or get transcripts until all fees are paid. But they are kept informed of outstanding fees. Salasa says all students are reminded about outstanding fees on a monthly basis.

By 26 February 2015, 619 students had not been able register because of unpaid fees from the previous year. This dropped to 364 by 24 April. The problem cuts across race: while black students are predominantly affected, a significant minority are white (101 in February, 39 in April).

As of 2015, the fees for most undergraduate degrees at UCT are in the region of R50,000 a year, but actuarial science costs R63,000. The academic development programme aimed at disadvantaged students, which effectively involves doing first year over two years, typically costs about R35,000 a year. To this must be added textbooks, stationery and residence fees (including food, at least another R50,000), as well as extra fees for keen students who take additional courses.

Few South African households can afford this. Most black and many white students depend to some extent on financial aid.

Before looking at the details of financial aid, it is worth understanding something of UCT’s finances. According to UCT’s latest annual report, in 2013 the institution’s income was just under R2.2 billion and its expenditure a little more than this. For the first time in several years, the university spent more than it earned, and it is not expected to have a surplus again until 2018. The state subsidy per student in real terms (taking inflation into account) has declined in recent years, putting the university under additional pressure.

Here is a summary of the university’s income and expenses taken from the latest annual report (amounts are in millions of rand):

So why are UCT’s fees high? Vice-chancellor Max Price explained to GroundUp, “If we only depended on government money, all the universities would look the same. Our fees are higher because we have more middle-class students who can afford to pay them, which improves the staff -to-student ratios. But no student should be prevented from coming here because of fees.”

The table shows that UCT’s fees are a substantial part of its income, without which the university would not be able to maintain its status as a leading academic institution. The university has leading researchers in HIV, TB, astronomy, zoology, mathematics and many other fields. Its research output is increasing, as are the number of National Research Foundation rated scientists, whose ratings are determined through an international process.

UCT consistently comes first on the continent and does well against international institutions in several rankings. The annual report makes clear — as does Price in his interview with GroundUp — that academic excellence is something that the people running the university intend to maintain.

But this puts financial pressure on working class students. An associate professor in the science faculty said, “Even kids who get full financial aid have to send a substantial amount of money home and take a job.”

Students across the country depend on the government’s National Student Financial Aid Scheme (NSFAS). The NSFAS budget for 2014 was R9.2 billion. The scheme provided aid to about 450,000 students, and this has grown from 191,000 in 2009. Yet the fund can still only help one in every two students. (Sources: keynote address by CEO Msulwa Daca, NSFAS FAQ and media statement.)

Bank loans are another option for students. But there are conditions. Standard Bank, for example, requires someone to stand surety who earns at least R3,000 per month.

According to UCT’s annual report, undergraduates received a total of R550 million in financial support in 2013, up from R452 million in 2012. “This support comes from various sources; corporate and other external bursaries support students to a value of R229 million and NSFAS provided loans amounting to R117 million. UCT contributed R104 million from council controlled funds. In addition, income from endowments and other funds available to the University contributed R56 million.”

The loans are interest free while students are studying, and repayments only start once they are employed and earning more than R30,000 a year. Also, depending on the student’s year-end results, up to 40% of NSFAS or UCT loans can be converted to a bursary that need not be repaid.

There are several requirements affecting a student’s eligibility for aid, and these differ between UCT and the NSFAS.

The first is residency status. Applicants for financial aid applicants at UCT can be permanent residents or citizens of South Africa, but NSFAS requires that they be South African citizens.

A student’s financial situation is also considered using a government determined means test that all tertiary institutions have to use. It considers several factors including family size, how many people in the family are studying and where you live. Salasa says that to be eligible for UCT financial aid your annual family income needs to be roughly R230,000 or less. For NSFAS funding it’s R126,000 or less.

There is also an Expected Family Contribution towards studies. UCT states, “The most financially needy students could pay as little as R1,050 or less towards their cost of study each year.”

Students with a gross family income of less than R550,000 are eligible for what is called GAP funding. Salasa explains that “the Vice-Chancellor launched the GAP funding programme in December 2008, for 2009. It started off with a R4 million budget for 2009. We now are on about R25/R30 million this year.” The purpose of GAP is to assist students who cannot afford the full fees.

NSFAS offered a maximum loan of R67,200 in 2015. If a student’s costs (course fees, residence fees, food, books) is higher than this, UCT provides financial aid to meet the difference.

There are also academic requirements. For students entering first year, an academic offer to study at UCT is necessary — obviously. Students beyond first year must have passed at least half of their courses in the previous year.

The last two requirements are that this must be the student’s first undergraduate qualification, and the student cannot be under an administrative order (e.g. a court order to appoint an administrator to manage the payments of someone in debt).

Many South Africans desire a tertiary education. A Stats SA report says, “Education plays an important role in the labour market in several respects. Graduates are more likely to be employed in the formal sector. As many as 97,3% were employed in that sector compared to 52,9% of persons whose education level was below matric level.”

Perhaps as important to getting a job though, is the sense of personal growth, self-worth and the set of skills acquired to engage in society that often accompanies tertiary education. “I don’t think our country can provide free education for all,” says Zizipho Pae. “But it is something we should be aspiring to.”

Number of students at the University of Cape Town that are receiving financial support. Source: Riana Geldenhuys, Head: Media Liaison, University of Cape Town. (827 of the 3,553 recipients in 2015 get GAP funding.)

The demographic breakdown for UCT students who receive financial support in 2015. All students are from South Africa. Source Riana Geldenhuys, Head: Media Liaison, University of Cape Town.