Thursday 20 September 2012

South Africa produces few PHD graduates

By Michelle Branco
Chief Commercial & Marketing Officer, Eduloan

A lot has been said about the state of education in South Africa, the quality of graduates that the country has been producing, and the impact on the economy.

Yet among the challenges that the Department of Higher Education faces are low enrolment rates for PHDs. Lack of finance and steep tuition fees contribute to the low graduation rate.

Fees are too high

According to a study conducted by Marc Gurgand and Adrien Lorenceau from the Paris School of Economics and Thomas Melonlo from Agence Francaise de Development, using information supplied by SA’s Department of Higher Education, tuition fees for tertiary education in South Africa are relatively high in relation to average income per household, particularly when compared to the ratios of other developing countries. That has a direct impact on the enrolment rates for tertiary education.

Increasing the number of PhD graduates in South Africa is of particular interest to Eduloan, as doing so will go a long way to enlarging  the country’s skills pool, which has suffered tremendous drainage over the years.

As the National Development Plan report correctly points out, if South Africa is to be a leading innovator, then urgent and particular focus needs to be paid on increasing the number of graduates, post-graduates and PhDs in all science, engineering, technology and mathematics related fields.

Private funders such as Eduloan have played a role in helping to accelerate the numbers and fill the gaps that previously existed. One of the findings from the research shows that 76% of students who applied to a public university enrolled when given a loan, whereas only 53% did so without a loan. Data sourced from the Department of Education’s Higher Education Management Information System (HEMS), which collects individual data on every student entering the higher education system,  when matched with the Eduloan data, reflects that students on loans are more likely to go on to complete their studies.

Study loans as a solution

Eduloan supplied the impact study with two sets of critical information: data for applications between 2004 and 2007, as well as data indicating successful loan applications.  Statistics show that the ‘pay as you study’ methodology has had a positive impact on the number of enrolments and graduations at tertiary institutions, especially considering that in a developing country, the number of people who are affected by the credit crunch, have a very slim chance of being allowed to continue with their studies.

The authors found that a significant portion of the population still experience credit constraints in accessing higher education, particularly in the low to intermediate income brackets.

Recipients of loans must be in full-time employment and earn more than R2000 after deduction of Eduloan’s monthly reimbursements and the instalment must not exceed 25% of the monthly salary.

There is no doubt that the economic crunch reduced access to refinancing for a lot of people, with commercial banks tightening  lending laws and  thus further limiting access to credit, even for the middle class.

Eduloan has managed to remain a viable, affordable and responsible loan option for many students who otherwise would not be able to afford the costs associated with tertiary study. Eduloan’s involvement in the local tertiary sector assists in creating education that is accessible to all South Africans, leading to the up-skilling of the population and contributing to the overall development of a skilled, competitive nation on the global stage.

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