Abstract:

The Post-school, Education and Training (PSET) system in South Africa comprises all education and training provision for those people who have completed school, those who did not complete their schooling, and those who never attended school. In South Africa, the PSET system is largely funded through three main sources that includes:
(i) subsidies from government
(ii) University student fees and
(iii) private sector endowment funds.

Admittedly, the South African PSET system is diverse in terms of institutions age, size, product offerings and historical backgrounds. However at many times, the fees charged by Universities for similar programmes differs widely between institutions. The key question to be addressed within the current context is what accounts for differences in fee structure of programmes in public higher education system in South Africa?

The study captured interview data from higher education industry experts and policy makers in PSET system. The study found that the determinants for the differences in fee structure are an interplay of three factors that include:
(i) Policy and legal environment
(ii) Financial and economic considerations and
(iii) pure market forces.

Firstly, the legal and policy environment in South Africa is such that the primary mandate to determine cost drivers such as enrolment of staff, salaries, University operation and accordingly the fee structure is vested in the University Councils through The Higher Education Act 101 of 1997. Universities are thus autonomous institutions that govern their affairs to advance the mandate of the University within the prescribed legal framework and meeting the requirements of their stakeholders. The Government of South Africa through the National Department of Higher Education and Technology (DHET) is a key stakeholder in affairs of the Universities and funding of Universities. The DHET provides guidelines that also helps University Councils in determining the fee structure but in both legal and practical ways the determination rests with Councils of Universities. The underlying issue is that the Universities in South Africa have diverse backgrounds, thrusts, strategies, and philosophies based on history of South Africa and apartheid in particular that created some of these differences in Universities.

Secondly, the financial considerations are multifaceted and centered on Activity Based Costing (ABC). This is where the actual costs incurred for running the programmes and Universities is factored within the different context of size of institutions, programmes being offered, level of programmes and the nature of the curriculum design and implementation methods. Based on the funding through government subsidies Universities are recommended to adopt Activity based costing whose output has some bearing on the fee structure of programmes among other factors.

Thirdly, the fee structure in South Africa is largely an outcome of market forces within the confines of policy and financial considerations. In the diversity of Universities in South Africa, market forces play a pivotal role in determining fees. The leading market forces are:
(i) perception of stakeholders who are students,
(ii) reputation and
(iii) the demand and supply of perceived quality of programmes from different institutions.

In conclusion based on perception of industry experts, the differences in fee structure are as a result of largely market forces rather than policy and legal environment.

Keywords:

Post-school, Education and Training (PSET), University student fees, Activity Based Costing.