Buckle up — it's a wild ride through spreadsheets and broken dreams
Picture this: you're running a university. You've got students to educate, lecturers to pay, buildings to maintain, and a vision of a brighter, more skilled South Africa to uphold. Noble stuff. Now imagine someone keeps quietly raiding your budget to pay for other things — like a struggling airline, or early childhood programmes — while handing you a Post-it note that says "good luck." Welcome to South African public higher education, where the funding situation is less "steady ship" and more "Titanic with a motivational poster on the deck."
Patrick Fish and Linda Meyer's paper, The Debt Spiral: The Survival of Public Higher Education, takes a hard — but necessary — look at how South Africa is managing (or rather, mismanaging) the funding of its universities and colleges. Spoiler: it's not going brilliantly. But let's walk through it together, shall we?
The National Debt: Everyone's Favourite Party Guest Who Never Leaves
First, the big picture. South Africa's national debt is having the time of its life. The country's debt-to-GDP ratio was hurtling toward 75% by March 2024, with plans to hit 80% shortly after — like a car with no brakes going slightly uphill. In 2023/24, the country spent R354.5 billion just on interest payments. That number is expected to balloon to R455.9 billion by 2026/27. To put that in perspective, that's not paying off debt — that's just paying the interest on the debt. It's the fiscal equivalent of only paying the minimum balance on your credit card every month and wondering why the number never goes down.
The Treasury's solution? Borrow more to cover the interest. Yes, really. This is technically called a "debt spiral," and less technically called a "terrible idea." The upshot: every state-funded sector, including universities, faces tightening budgets as the government scrambles to keep the financial plates spinning.
Higher Education: Not Exactly Priority Number One
Here's where things get spicy. During COVID-19, the government dipped into the higher education budget to help bail out South African Airways. SAA — the airline that has needed more rescuing than a cat stuck in a cactus — was deemed more immediately essential than, say, universities. This set a rather uncomfortable precedent: when money gets tight, higher education becomes the government's emergency piggy bank.
Then came the R1.8 billion redirected from university infrastructure to fund Early Childhood Development (ECD) grants. Now, nobody is arguing that small children don't deserve support — of course they do, tiny humans are important. But the money came at a steep cost: university infrastructure funding plummeted from R3.5 billion to a meagre R673 million. That's not a trim — that's a haircut with garden shears.
And it didn't stop there. November 2023 brought an additional R2.6 billion cut to higher education, with justification being that fewer TVET college students than expected qualified for financial aid due to poor academic results. So the students underperformed, the money was clawed back, and universities absorbed another hit. By year's end, higher education had lost R4.2 billion in 2023 alone. Remarkable efficiency in the wrong direction.
NSFAS: The Financial Aid Scheme That Keeps Everyone Guessing
Enter the National Student Financial Aid Scheme — NSFAS — which, in theory, is a wonderful thing. Free education for qualifying students! Opportunity! Upliftment! In practice, however, NSFAS has become something of a soap opera. Ghost students receiving funding. Arbitrary decisions. Corruption allegations. Leadership controversies. Delayed payments that leave universities covering costs while waiting for reimbursements that may or may not arrive on time. It's the kind of system that makes accountants cry softly into their spreadsheets.
For the first time ever, NSFAS funding now exceeds the total university subsidy — R46 billion versus R43 billion. This marks a significant philosophical shift: more money now flows to student support than to institutions themselves. Whether that's a feature or a bug depends entirely on whether NSFAS actually delivers that money effectively. Current evidence suggests... mixed results, at best.
The Economics Nobody Can Ignore
Here's the genuinely compelling argument Fish and Meyer make: investing in tertiary education is not charity — it's smart economics. The World Bank, which once favoured primary education for its returns, did a full U-turn by 2021. Tertiary education graduates see a 17% increase in earnings globally, and a remarkable 21% in Sub-Saharan Africa specifically.
Meanwhile, South Africa's unemployment figures are nothing short of alarming. People without matric face 38.8% unemployment. Those with tertiary qualifications? Just 8.5%. Among 15-24-year-olds, a staggering 67.6% are not gainfully employed. Over 10 million young people are classified as NEET — not in employment, education, or training. These aren't statistics to skim over; they represent an entire generation of potential being squandered.
The Missing Middle and the Mountain of Debt
Then there's the "missing middle" — households earning between R350,001 and R600,000. Too wealthy for NSFAS bursaries, too cash-strapped to comfortably pay full fees. These taxpayers fund the system but cannot meaningfully access it. An income-contingent loan scheme has been floated occasionally by Minister Nzimande, roughly with the frequency and reliability of a solar eclipse — mentioned rarely, never quite arriving.
And the student debt? A jaw-dropping R21 billion sitting on university books. Students who can't pay their fees can't graduate. Universities haemorrhage funds trying to manage the shortfall. The cycle perpetuates itself with cheerful relentlessness.
The Bottom Line
South Africa's higher education system is caught in a perfect storm: national debt squeezing budgets, ad hoc policy decisions raiding university funds, a financial aid scheme struggling under its own dysfunction, a missing middle left to flounder, and R21 billion in student debt quietly threatening institutional collapse — especially at historically disadvantaged universities.
The authors' call is clear: this is not merely a financial problem, it is a national emergency dressed in academic robes. Without deliberate, strategic intervention, universities — particularly newer and historically disadvantaged ones — could face collapse within five years.
The good news? None of this is inevitable. The bad news? Fixing it requires political will, coherent policy, and perhaps someone hiding the national piggy bank from the airline industry.
The students are waiting. The clock is ticking. The spreadsheets are weeping.