On average only 30% of students from OECD countries will leave university with a degree in hand. High student dropout rates are particularly prevalent in countries like South Africa, where only 55% of contact students graduate within n+2 years (where “n” is regulation time). This is especially concerning considering the already low participation rate (1 in 5 high school students) in the country.
Poor university throughput rates have an added knock-on effect, where grants provided to universities are lost on non-graduating students. This means that our country fails to reduce inequality, and loses tax revenue that would have been gained from graduate-level jobs. The current status quo is thus proving ineffective in producing university graduates. The problem is only going to get worse as more students enter the system. This is the most critical issue facing the higher education sector in South Africa after the announcement of free tertiary education!
For bursary funders, when a student fails, there are two direct expenses: Firstly, it is unlikely that the student will be able to pay back their bursary obligation. This obligation can be up to ZAR 360K+ if the student fails in their final year. Secondly, the company finds itself in a situation where it must now find a new student that it can recruit to meet its graduate requirements. The recruitment expense for a single graduate has been estimated at around ZAR 40k.
