The bad news for South Africans when the Finance Minister announced the national budget was the 0.5% increase in VAT. Although better than the 2% increase that was planned previously, it still means that nearly all goods and services will be more expensive. There is also another 0.5% increase planned for next year.
Universities and TVET Colleges
The good news for students who want to study at national universities and TVET Colleges is that there is a sizable increase in the budget of NSFAS for the coming year. The government allocation to the National Student Financial Aid Scheme will increase from R53,6 billion to a total of R55,4 billion for the coming year.
Direct allocations to universities increase by 1,5% to R48,4 billion and the funding of the country's 52 TVET Colleges increases by 4,4% to R14,2 billion.
While the increase in funding for NSFAS appears to be substantial, university and college fees also increase each year and this will swallow up much of the additional funding.
Over 2 million students will be funded
The Higher Education and Training department expects to be able to fund 2.1 million students with loans and bursaries over the next 3 years. The 4,4% increase this year is expected to be matched next year.
These transfers are expected to increase at an average annual rate of 4.4 per cent, from R46.6 billion in 2024/25 to R53.1 billion in 2027/28.
Last year NSFAS introduced a loan option to cater for 'missing middle' students - those from families whose household income falls between R350 000 and R600 000. The funding for this scheme is provided by the National Skills Fund at a cost of R3 billion over the medium term. This is budgeted to be about R1 billion per year.
The education sector as a whole receives an additional R28,1 billion in the coming year. Basic Education will receive the most, with funding for national schools to increase to R332,3 billion for the year.
This is a developing story
