Free higher education model unsustainable – World Bank

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The World Bank has flagged the South African national treasury’s funding of a phased-in approach to fee-free higher education as unsustainable, saying it should move to a contingent loan income system instead, writes Tehillah Niselow for Fin24.

The Washington-based lender released its 12th economic update for South Africa on Tuesday, predicting modest growth of 1.4% for 2019, far below the expectation of emerging markets at 4.2% and the Sub-Saharan African average of 3.7%. Sébastien Dessus, World Bank South Africa programme leader, said improving access to the tertiary sector was “one of the main ways to foster economic inclusion”. After four years, free higher education will add a 1% cost to gross domestic product (GDP), without improving the quality of education or the number of students entering universities, the World Bank estimates.

Following widespread protests on higher education campuses in 2015 and 2016 in demand of fee-free learning, former president Jacob Zuma ignored a recommendation by the Heher Commission of Inquiry to give students income contingent loans (people pay back their study fees after their income crosses a threshold), announcing instead that the fiscus would fund the fees for first-year students coming from households earning less than ZAR350,000 (US$25,500) per year.
Full report on the Fin24 site

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