Presentation to the Parliamentary Portfolio Committee on Higher Education and Training

1. Presentation to the Parliamentary Portfolio Committee on Higher Education and Training COMMITTEE ROOM E249, SECOND FLOOR, NEW ASSEMBLY WING, CAPE TOWN WEDNESDAY, 15 FEBRUARY 2012 Professor Russel Botman (Member of HESA Exco) Dr Jeffrey Mabelebele (Acting CEO)

2. PRESENTATION OUTLINE • Admission processes in Higher Education Institutions • Enrolments in Higher Education Institutions • Funding of the Higher Education System • Supporting academically deserving students in financial need • Conclusion

3. Admission & registration processes • Higher Education Act, 1997 (101 of 1997) as amended, requires each institution “to publish its admission policy and make it available on request”. • HEIs must clearly stipulate the pre-registration application process to be followed by all prospective students seeking admission to the institution. • HEIs may require prospective students to undertake other assessment activities as part of the pre-registration application process. • If the number of applicants exceeds the places available at the institution, a selection process will be followed - balancing the continued recognition of academic merit and excellence with the values of equity and diversity (see Section 37(4)(b) of the HE Act).

4. Admission & registration processes • Council of HEI determines the admission requirements to the University in accordance with the policies promulgated by the DHET and the stated national imperatives (refer to Section 37(4)(a) of the HE Act). • HEI may provide alternate pathways for new students who do not meet the minimum admission requirements set with the aim of enhancing access whilst assuring, as far as reasonably possible, the success of the student - Foundation programmes and ‘extended’ curriculum etc. • Council further approves the numbers of students to be admitted to a qualification in accordance with the institutional enrolment plan. • Demand for access far exceed available places at HEIs, • UP received 33 982 applications for 9500 places available in 2012 • TUT received 51 746 for 13096 places available

5. Admission & registration processes Higher Certificate/Diploma/Bachelors degree qualifications 8 All new students must meet the minimum entry requirements prescribed by the DHET and the HEIs. 9 HEI Senate may, with the approval of the Council, set additional and/or alternative entry requirements to the statutory minimum admission requirements. 10 In respect of foreign students applying for admission to an undergraduate qualification, a ‘certificate of exemption from the matriculation examination’ issued by the Matriculation Board for HESA (or its legal successor) is a pre-requisite for admission to undergraduate study. 11 Applications from international students are encouraged, but HEIs reserve the right to give preference to South African citizens and permanent residents.

6. Enrolments Head count enrolments by race

7. Enrolments Participation rate, 2007 – 2010

8. Enrolments Emerging issues: • Low graduate output and below benchmarks set in the National Plan for Higher Education (2001); • Low graduate output impacts on the pipeline into post- graduate studies; • Managing the opposites – increased access vs increased success; 4 Steady growth of the system as projected in the Ministerial Statement on Student Enrolment Planning (2011), focussed attention to be placed on increasing throughputs. 5 The two planned universities will not make a significant contribution to the system’s growth, instead the expansion of the FET college sector should be a priority.

9. Funding of the HE system Principles for HE system funding (White Paper 3, 1997): • Sharing of costs: Because HE generates both public and private benefits, the costs must be shared by government and students and their families. • Autonomy in determining student fees: HEIsare able to set their own student fee levels. • Funding for service delivery: Government funding of HE is not designed to meet specific kinds or levels of institutional costs. It is linked to academic activity and output, and to the delivery of teaching and research activities. • Funding as a steering mechanism: funding framework is a goal-oriented one, built around incentives designed to steer the higher education system in accordance with national social and economic development goals.

10. Funding of the HE system Government funding is determined by student enrolment targets- Ministerial Statement on Student Enrolment Planning (2011) System is funded through: 1 Block grants (research output, teaching output, institutional factor, teaching input grants etc.) • Earmarked grants (funds to be used for the specific purposes determined by the National Treasury and/or the Minister of Education/Higher Education and Training - grants for: teaching and research development; recapitalisation; foundation programmes, clinical training, veterinary sciences, infrastructure development etc. • Tuition fees – fees charged to students 4 Third stream income – income by the HEIs

11. Income sources of public HEIs

12. Block grants & earmarked transfers

13. Funding challenges for the sector • The decline in state subsidies and increases in student fees • Tuition fee model for HEIs in the context of vast disparities of income and participation in higher education • Inadequate funding of the NSFAS • Managing increasing student debt, which has become an onerous task for most HEIs • Increasing economic pressures - declining revenues for the third stream income • Managing the balance between recovery of outstanding debt and interest of students to continue with their studies • Generally weak university/business relations • Limited research capacity of some universities • Lack of developed alumni and fundraising structures and absence of a culture of giving

14. Funding challenges for the sector HESA has taken positions on management of debt: • Students who still owe HEI money should be permitted to graduate • Students must sign a formal contract to pay their outstanding fees on beginning of employment; • Students should however, not receive their certificates until their debt has been settled; and • Universities are willing to provide any employer with a letter confirming that the student has graduated. • Many HEIs are as human and flexible as possible in credit management, and go to great lengths in accommodating deserving students.

15. Academically deserving students • HEIs in a precarious financial position against a real decrease over 10 years in the proportion of total income from Government subsidies. • HE expenditure is declining alarmingly in both real and student per capita terms. It is also declining as a % of the Government's budget and of GDP. • The decline puts pressure on the other 2 sources of income available viz tuition fee income and 3rd stream income - leaving universities in increasingly worsening financial positions. •  Expansion in student numbers in the HE system not matched by an increase in Government funding could jeopardise existing quality levels in higher education.

16. Academically deserving students 5 HEIs are committed to assisting all academically deserving students by all means possible. 6 Most HEIs commit huge financial resources to support large numbers of financially deprived students to obtain HE qualification, e.g. Rhodes University spends R36 million in 2012 out of its own coffers to support these students.

17. CONCLUSION • Admissions into universities is competitive, taking into account academic merit of applicants and equity imperatives. • Funding of the HE system is under pressure, as government subsidy declines. • If the college sector fails to expand significantly, this will continue to put undue pressure on HEIs to admit students without the necessary resources and capacity. • Whilst access imperatives remain relevant, HEIs are under pressure to improve their student success rates – this is where emphasis should be placed. • HEIs are doing a lot, on their own, to support academically deserving students, who are in financial need.