FINANCIAL CRISIS FOR SOUTH AFRICA’S TERTIARY INSTITUTIONS

“WILL ONLY THE RICH BE ABLE TO GET HIGHER LEVEL EDUCATIONS FROM EXPENSIVE PRIVATELY RUN COLLEGES?”

With the extremely high overheads that South African universities are having to cover, are these institutions destined to go bankrupt over the next few years? Where will South African students find alternative forms of education if massive institutions like the University of Cape Town shut down?

Will only the rich be able to get higher level educations from expensive privately run colleges?

The figure below shows that tuition fees provide 34.1% (R21.5 billion) of income for South Africa’s 20 universities and 6 universities of technology.

According to Stats SA, the costs of running higher education institutions have increased rapidly.

Stats SA additionally noted that from 2006 to 2015, higher education institutions’ spending increased on average by 10.9% per year, while the amount of income earned only grew by 9.9% per year. The figure below puts this spending/income ratio into perspective.

Once institutions start spending more than their annual income, it’s only a matter of time before they can’t operate anymore.

The question we need to ask ourselves is whether or not South African universities will survive this financial crisis? What are the alternatives to the current systems in place to educate the people of South Africa, particularly the poor?

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