Should varsities receive a Covid-19 stimulus package?

The Covid-19 coronavirus pandemic has created profound disruptions in our economy and society.

Due to the challenges caused by this pandemic, most universities have decided to move from face to face classes to online teaching – more accurately defined as emergency remote teaching and learning – so as to complete this academic year while preventing the spread of the virus.

Online learning is the result of careful instructional design and planning, using a systematic model for design and development. With remote emergency teaching and learning, this careful design process is absent.

Careful planning for online learning includes not just identifying the content to be covered, but also how to support the interactions that are important to the learning process.

Planning, preparation and development time for a fully online university course typically takes six to nine months before the course is delivered.

Emergency teaching and learning is a temporary shift of instructional delivery to an alternative delivery mode due to crisis conditions. Hence, one cannot equate emergency remote teaching and learning with online learning, nor should one compare emergency remote teaching and learning with face to face teaching.

What is crucial is the quality of the mode of delivery and although assessment methodologies will differ between face to face teaching and remote teaching and learning, the quality of the learning outcomes should be comparable.

The financial model used in a South African (residential) university consists of three main income sources: the state or government through a subsidy (the so-called block grant), tuition fees and a third-stream income (which is mainly a cost recovery component from contract research, donations and interest on university investments).

The National Student Financial Aid Scheme (Nsfas) contributes to the tuition fees through a department of higher education, science and Innovation Bursary Scheme. It provides fully subsidised free higher education and training for poor and working class students (typically from households with a combined income less than R350 000 per annum).

The negative impact of Covid-19 on the income drivers of the university can, and probably will, be severe. Although the subsidy from government can be “protected” for a cycle of two to three years through the National Treasury, the pressure on income derived from tuition fees (that component which is not funded through Nsfas) will be increasing, as households would have been affected by the nationwide lockdown and with the economy in deep recession, a significant number of jobs would have been lost.

The economic downturn, due to both Covid-19 and a sovereign downgrade by all rating agencies, has already negatively impacted local financial markets as well as the global economy. The multiplier effect of this would be that the value of investments and endowments decreases (at the time of writing the JSE was still 20% down compared to the previous year), and philanthropic organisations and foundations will most probably reduce or even terminate “givings” to universities.

Industry, private sector and commerce will reassess their funding to universities, whether for research or bursary support. Overall, it is possible that the income sources for universities can be affected negatively in the short-term, but it will definitely have longer-term implications on the financial sustainability of universities.

In this regard, it would be important for universities to perform scenario planning on the long-term impact of Covid-19 on the financial position of the university and to adjust their strategic plans accordingly.

The major expense item in the university budget is the salaries of staff. This item is a fixed expense, particularly in the short- to medium-term. Hence, when introducing emergency remote teaching and learning, the switch to a different pedagogy and approach, university management did not have sufficient time to restructure the fixed cost part of the budget.

There are certainly other items in the budget which can be reduced, reallocated or removed, and hence universities should, as a preliminary measure and based on their current financial position, develop a revised or adjusted budget for this year.

Obviously, these costs need to be offset against the fact that residences were not used for some time, with a subsequent decrease in water and electricity usage and savings on catering in the residences.

It should, however, be argued that even if the students were absent from campus and the residences for some time, the salaries of all staff involved with particular functions in relation to residential students, as well as certain fixed and non-controllable costs, still need to be paid.

When the offset has been assessed, the residual value – that is the additional cost, is still a substantial cost to the university due to the implementation of emergency remote teaching and learning.

The question is: who will fund this cost?

The instinctive answer would be the university.

I would argue that this cost should be borne by the university, the student and government.

Read: Will the 2020 academic year be salvaged?

This is a crisis – a global crisis of unprecedented proportions – and in this moment of restrictions on movement, telecommuting and social distancing, working together is essential to overcome this crisis. Students’ agency is key, in that they would exhibit the will to positively influence their lives and the environment around them. This is what social justice and fairness are – contributing to the development path of the country.

Although it would be fair to assume that a rebate or pro-rated amount on the residence fees for students should be considered, it would not be an acceptable rationale to apply a rebate on tuition fees, as this academic programme will be delivered, albeit through a different mode, but ensuring the relevant and appropriate quality.

Furthermore, as indicated earlier, the higher education system will be impacted, at least financially, negatively in the short- and medium-term. And no country can afford a weak, non-functioning higher education system, hence a fiscal stimulus package from government would be crucial to assist the sector during the Covid-19 pandemic and beyond (in the short-term).

South Africa has a highly differentiated higher education system, which is one of the legacies of our history.

Historically disadvantaged institutions will be affected the most during this pandemic.

Covid-19 is presenting unique challenges to universities globally, but it also provides us with an opportunity to be innovative, to improve social solidarity, and to co-create new ways of engagements among stakeholders for the greater good of society.

However, without a fiscal stimulus package from government, this pandemic can render our “differentiated” higher education system a massive blow, which will be difficult to recover from.

Petersen is the rector and vice-chancellor of the University of the Free State

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