Cost implications of fee-free education on financial performance of selected universities in Western Cape

Abstract

The years, 2015 and 2016, saw students’ tuition fee escalations in excess of 10% triggering mass protest action at a national level, aimed at preventing fee increases. Student demands were initially for smaller fee increases, then no fee increases, and then finally fee-free higher education. The debate on the mode of financing of higher education is not a new one. For decades, there have been opposing views and conflicting efforts where the financing of higher education is concerned. This study focuses on the effects of fee-free education on the financial performance of selected universities in the Western Cape. The anticipated outcomes and contributions are that fee-free higher education is fiscal suicide in the current economic climate, and is unlikely to produce the desired outcomes. Increased financial burdens on institutions will lead universities to search for cost-effective modes of education. The findings show that universities are already operating on a tight budget to a point that in the long run the selected universities will have to find other ways of generating income.