Financing for equity in higher education

1. Education resources to subnational governments

Introduction

Key financing indicators (UIS Data)

In 2023, the gross enrolment ratio for tertiary education (both sexes) was 23%. The initial government funding per tertiary student as a percentage of GDP per capita was 62% in 2024.

Tuition-free status

Higher education is not tuition-free; with the government provides subsidized, fee-free education through the National Student Financial Aid Scheme for qualifying students (see section 3).

In late 2015, the student-led #FeesMustFall movement was a response to rising tuition fees that made it increasingly difficult for low-income students to access higher education, alongside additional demands for quality education and the decolonisation of the curriculum. This led to a freeze on student fee increases and the formation of a Presidential Commission (Fees Commission) in 2016 to make recommendations on future student funding. Its mandate included, among others, examining whether fee-free higher education was feasible within the country’s economic and fiscal context and exploring the balance between equity (access for poor students ) and sustainability (ensuring that universities remain adequately funded).

From the 2018 academic year, the government pledged to provide fully subsidized higher education to poor and working class students within a specified financial eligibility threshold (R350,000 family income per annum). Since then, public student aid programmes like the National Student Financial Aid Scheme have increased higher education subsidies for low- and middle-income students.

Governance

Higher education institutions are primarily funded by the Department of Higher Education and Training (DHET), which provides block grants and earmarked grants directly to public institutions, such as universities, universities of technology, comprehensive universities and Technical and Vocational Education and Training (TVET) colleges.

1. Education resources to subnational governments

Higher education institutions receive funding directly from the central government through block grants and earmarked grants.

Block grants receive the largest portion of government funding based on student enrolment, research outputs and institutional size. The funds should ensure that institutions cover teaching, learning and operational costs. Funds are also allocated to support postgraduate studies, innovation and knowledge production.

Research funding is distributed through the National Research Foundation (NRF) but coordinated with DHET priorities. Special project funding includes grants for initiatives such as curriculum transformation, digital learning platforms,, and partnerships with industry. It also helps institutions align with broader development goals like skills training and employability. TVET college funding covers vocational programs, infrastructure, and lecturer development to strengthen technical skills training.

Earmarked grants include infrastructure development, student housing, research capacity, and academic staff development.

2. Education resources to institutions

Funding for private universities in the absence of public institutions

Private higher education institutions do not receive government subsidies or incentives. Students at private institutions are additionally not eligible for any financial aid from the National Student Financial Aid Scheme.

Allocation and equity

Public universities receive direct government funding in the form of block grants and earmarked grants, as outlined in the Ministerial Statement on University Funding: 2025/26 – 2027/28. Block grants are intended for operational costs, including the maintenance of assets used for university teaching, learning, and research activities. They specifically include funding for teaching inputs, institutional factors, actual teaching outputs, and actual research outputs. These grants are council-controlled funds which can be used at the discretion of the council and university management.

As part of the ‘institutional factors’, grants are provided to universities based on the proportion of students from disadvantaged backgrounds, with the aim of increasing the participation, success and graduation rates of disadvantaged students. This grant defines disadvantaged students as African and Coloured South African citizens.

3. Education resources to students

Admission for vulnerable groups

According to the 1997 Higher Education Act, the admission policy of a public higher education institution must include appropriate measures to redress past inequalities and may not unfairly discriminate in any way. The 1996 Constitution of the Republic of South Africa similarly requires all educational institutions to consider equity and the need to redress the results of past racially discriminatory laws and practices.

However, there is no national quota system for the admission of historically disadvantaged learners. Institutions may set their own admissions processes in accordance with these laws. In some historically white universities, admission targets for each racial group in certain programmes of study have been set to provide access and improve participation for disadvantaged students.

Scholarships, grants and loans for vulnerable groups

National Student Financial Aid Scheme

The National Student Financial Aid Scheme (NSFAS) is an independent juristic organisation that manages student financial aid, funded by the Department of Higher Education and Training. NSFAS is responsible for administering loans and bursaries and allocating these to eligible students from low-income backgrounds and developing criteria and conditions for the granting of loans and bursaries to eligible students in consultation with the Minister of Higher Education and Training. As of 2018, this funding has been provided as a bursary rather than a loan.

NSFAS, while technically student-focused, provide student funding to cover tuition and living costs. To maintain stability in universities, NSFAS guarantees payments for significant number of enrolled students.

The NSFAS Disability Bursary Programme provides financial support to students with disabilities who require financial aid and are able to pass their academic subjects. Assistance is provided in the form of tuition, accommodation, transport, meals and assistive devices.

4. Support for students’ living costs

Transportation

In addition to tuition support, the National Student Financial Aid Scheme (NSFAS) provides students with funding for transport expenses to eligible students.