1

Private Education in South Africa About Richfield Graduate Institute of

Technology Representation History National Higher Education Budget Rising cost of Public Higher Education Non-subsidised Private Higher Education Low-cost Private Education – a cost efficient

contributor to Higher Education

2

South Africa is a developing country. Huge social and economic problems. Youth Unemployment 40% Wide gulf between recipients of development

aid on the one hand and skilled professionals on the other.

Increasing dependence on social grants Increasing dependence NSFAS funding

3

NSFAS < R120 000 pa Private Higher Education – mainly for rich and

super rich No loans for missing middle NSFAS funds public institutions only Poor Increasingly dependent on NSFAS

funding Financial Institutions – Fewer loans to Middle

- Loans issued are too small

4

Higher Education Act regulates both Public & Private Providers

Constitutional Right Niche Higher Education Programmes No State Subsidies, Grants or Allowances to

Private Providers Low Cost Private Providers addresses the

needs of the Poor Richfield – 25 Year History

5

Established in 1990 as an SME in Tongaat Initial focus on personal computers in business

solutions Previously known as PC Training & Business

College until July 2015 Active in Higher Education, TVET, Distance

Learning & Skills programmes across SA Currently below 20 000 students – equivalent

to a “small university”

6

45 Accredited Campuses (Multiple Accreditation) 33 Higher Education Campuses (Contact Campus)

o HE Programmes in Business, Information Technology, RPL Activities & Public Administration

o Contact & Distance Learning available 15 QCTO Campuses 33 TVET Campuses

7

Higher Education Campuses - Property mainly group owned Property investment (R1 bn) Campus infrastructure (R0, 5bn) Information & Communication Technology (R400 m)

Represented in most Provinces & major Centers

Multiple Programmes 20 CHE Accredited Degrees, Diplomas & Higher

Certificates 14 ETDP, Services, MICT, MerSeta, Inseta, Cathseta,

W&R Seta, Chieta Accredited Programmes

8

Perceived to be Elitist and Expensive Yet Richfield Is Low Cost And Provides Mainly

For The Poor Students keep away in hope of getting NSFAS

funding Bank funding is limited and expensive Richfield does not charge interest on student

loans Payment terms extended to keep students in

the and prevent them from dropping out

9

Fee Letter sent to Dr Blade Nzimande and Dep. Minister Manana since April 2013

2012 to 2016 negative impact on Higher Education Programmes

Impact of free funding at TVET colleges Increased NSFAS funding Closure of Campuses, sale of Properties and

retrenchment of staff 1 200 Staff in 2012 < 800 Current

10

Placed 1020 permanent academic & support staff jobs at risk

Reduced permanent employment from 1070 post to 733 current

Permanent closures or merger of 16 campuses Temporary moth balling of 10 000 seats Capacity reduced from 30 000 to 21 500 seats Higher Education & TVET current utilisation

12 000 seats Disposal of 8 inner City properties which were

accredited & fitted out as modern campuses

11

12

0

2000

4000

6000

8000

10000

12000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Student Enrolment Statistics

Higher Education Division TVET Division Skills Division Distance Learning Divison

Higher Education budget is made up of: University subsidies – R28 bn Education administration – R 14.6 bn NSFAS – R14.3 bn Skills development levy – R15.9 bn TVET – R6.9 bn

None to private providers

13

University fees cost:

Parents – R40 000 (approximately) Tax Payer (R42.6 bn / 1 m students) – R 42 600 Donor funding (E.g: Wits – R14 000) Total cost – R 96 600

Richfield’s cost ≤ R20 000 Includes 10’ Tablet PC Free Electronic library, Pressreader Subscription,

eLearning/Moodle support

14

While several Public and Private Institutions offer similar courses, their fee structure is different.

The proposed fee increases at Public Tertiary

Institutions as published by the eNCA website are indicated below:

(eNCA website https://www.enca.com/south-africa/infographic-which-sa-university-most-expensive

15

University 2015 2016

North –West University R47 000 R61 125

University of Pretoria R36 250 R45 840

University of KwaZulu Natal R39 170 R68 790

University of Johannesburg R22 520 R49 305

University of Free state R30 115 R39 025

University of Cape town R62 000 R69 000

Stellenbosch R33 164 R48 801

The amounts listed above are the fees for the Bachelor of Commerce, Bachelor of Science and Bachelor of Arts and Social

Science degrees. They are the most recent fees listed on the universities' websites for 2015 and 2016."

16

17

R0

R10 000

R20 000

R30 000

R40 000

R50 000

R60 000

R70 000

R80 000

North –West University

University ofPretoria

University ofKwaZulu Natal

University ofJohannesburg

University ofFree state

University ofCape town

Stellenbosch Richfield

2015 2016

“FREE higher education for all is a bad idea,” Centre for Higher Education and Training (CHET) director Dr Nico Cloete.

Support “Only the rich and middle class will benefit from free education as they are likely to qualify for university.”

“What is easy and morally defensible is free higher education for the very poor, like those who earn below R120 000 a year.”

18

The Pan African Student Movement The South African Further Education &

Training Student Association ( Safetsa) South African Students Congress (SASCO) South African Union of Students (SAUS) BUT Should not discriminate against low cost private providers such as Richfield

19

The National Development Plan for South Africa as well as White Paper on Post School Education, records that the Department of Higher Education and Training recognizes that independent private institutions play an important role in the post-school education and training environment.

Any reconceptualization of a post school education and training system would, most definitely be incomplete without reference to both public and private spheres.

20

The National Development Plan also requires the higher education sector to increase enrolment levels annually from 950 000 in 2010 to 1.6 million by 2030.

Unless we find ways to reduce the costs of delivering higher education, an increased enrolment will require increased funding.

Private Providers provide a large selection of certificate, degree and diploma products at affordable prices to cater for the large majority of South African students, who do not gain access to Public Universities. 21

2010 NEET = 2.7m 2014 NEET = 3.0M (CHET)

22

Private Institutions can provide the shortfall at a lower cost & more efficient rollout

Some of the increased capacity required

already exists in the private education sector for eg. Richfield has 8000 under utilised seats & a further 10 000 moth balled seats which could be brought to economic use at short notice

23

24

R0

R10 000

R20 000

R30 000

R40 000

R50 000

R60 000

R70 000

R80 000

Richfield(previously PC

Training &Business College)

Mancosa Damelin CTI Varsity College Boston Rosebank

BCom Degree (1st year of study)

Although accredited by the Council on Higher Education (which also “accredits” public universities), Private Higher Education Institutions are not allowed to call themselves "universities" in South Africa.

Neither are they allowed to benefit from the National

Student Financial Aid Scheme (NSFAS) or any direct state funding.

In addition, they are required to pay income taxes on

any surpluses they make.

25

In spirit of the vision of the National Development Plan, it is imperative for the South African Government and in particular the Department of Higher Education and Training to seriously consider funding private education in order to ensure the success of the country's post school education and training system in the near future and the substantial ETD capacity that has already been created.

26

Of the 1 million children who enter Grade 1, only 100 000 will enter university, and 53 000 will graduate after 6 years (Van den Berg, 2015).

Very poor graduation rates – 30% graduate in 3

years, 56% in 5 years (if UNISA included it drops well below 50%). National diploma even worse: below 50%.

Richfield Success Rates Degrees Diplomas Higher Certificates 27

% of GDP is < 1% ie 0.7%

4.50

3.00

2.18 1.76

1.44 1.39 1.38 1.24 1.20 0.95 0.93 0.71

Cuba

Chin

a

Finl

and

Mal

aysi

a

Gha

na

USA

Sene

gal

Aust

ralia

Indi

a

Braz

il

Chile

Sout

h Af

rica

28

Current: To qualify for NSFAS (less than R120 000) means that most of the actual middle class could be classified as “poor” – and they account for 75% of the population.

Proposed: A voucher system of R25 000 (> R120 000 but less than R180 000 pa) per year of study, subject to success in the prior year. This should be payable to accredited, registered and Approved PHEI’s Directly.

29

Current: To qualify for NSFAS (less than R120 000) means that most of the actual middle class could be classified as “poor” – and they account for 75% of the population.

Proposed: The scheme be continued but the discrimination against Low Private Providers be eliminated.

And….

30

Role players have to find a balance between helping poor students without giving privileged students unfair favour.

31

The major contributing factor for student de-registration is lack of funding which arises from:

Disadvantaged background Public University fees too costly Bursary applications not successful

32

Recognise Private HE providers & make NSFAS Funds available to students attending PHEI’s. Subsidise poorest of the poor in full i.e Tuition, Accommodation & Materials.

Introduce Voucher system for the ‘Missing Middle’

Accredit qualifying low cost private providers to participate alongside Public Universities.

Private Providers pay for their own Campus Property & Infrastructure

33

34