FINANCE FEATURE: Why are degrees so expensive?

by | Oct 13, 2025

Despite tuition appearing cheaper on paper, Wits students from financially disadvantaged households still grapple with mounting debt and the hidden costs of higher education.

  • Wits students face growing debt and hidden expenses that make higher education increasingly unaffordable despite seemingly low tuition costs.
  • Universities struggle with declining government subsidies, inflation-driven expenses, and financial strain, forcing them to raise student fees to survive.
  • NSFAS funding limits and inconsistent policies deepen student inequality, threatening to reverse the hard-won progress of the Fees Must Fall movement.

When Medupi Reginald Mathunyane, a final-year Biological Sciences student at Wits University, was defunded by the National Student Financial Aid Scheme (NSFAS) in 2022, the weight of uncertainty hit him hard. Months of appeals followed, each one a battle against bureaucracy and mounting financial anxiety. Today, as he nears graduation, his debt exceeds R100,000, growing every semester.

“I’ve done everything I can just to stay in class,” Mathunyane says, his voice carrying both determination and exhaustion. “But the stress of thinking about how I’ll pay back this debt never goes away. It’s like carrying a shadow over my studies, reminding me I might not make it through without sacrificing my dedication to my studies, with the hope that someday I will be funded.”

Mathunyane’s story is not unique. Across South Africa, students from financially disadvantaged households are feeling the squeeze. Yet on paper, higher education appears more affordable than ever. Professor Imraan Valodia, a former Wits University dean and respected economist, explains that comparing tuition fees over time without accounting for inflation gives a misleading picture.

“Degrees are not entirely more expensive,” he says. “If you take R60,000 in 2010, it would be roughly equivalent to R125,000 in 2025 when we adjust for inflation. By that measure, a R100,000 degree today is technically cheaper.”

But Valodia stresses that these numbers mask the lived reality for students. Over the past 15 years, South Africa’s consumer price index has averaged around 5% per year, while the higher education CPI (which tracks costs specific to universities such as equipment, laboratory maintenance and academic resources) has risen even faster. This means that even if tuition has not increased as sharply in nominal terms, the cost of delivering quality education has, leaving institutions and students caught in a financial tug-of-war.

At the heart of the affordability debate lies South Africa’s strained public finances. For years, sluggish GDP growth has constrained government revenue, leaving the Treasury with difficult choices between competing priorities: healthcare, social protection, infrastructure, and education all vie for the same shrinking fiscal pie.

South Africa’s GDP growth has averaged below 1% over the past decade, with Treasury forecasting just 1.4% in 2025. Weak growth means less tax revenue. And without sufficient revenue, the government cannot expand higher education funding without cutting elsewhere.

The 2025/26 Budget allocated R146.6 billion to post-school education and training, about 5.7% of the total R2.58 trillion consolidated budget. Debt-service costs alone consume nearly R426.3 billion, almost three times higher.

The numbers reflect the impossible trade-offs. South Africa spends generously on education in global terms, at about 6.1% of GDP compared to the global average of 4.4%, yet this has not translated into affordability for individual students. Much of the spending goes to maintaining an already burdened system rather than making degrees cheaper at the point of entry.

Wits spokesperson Sherona Patel highlights the pressures universities face, which often go unseen.

“The University generally receives its income from three sources: state subsidies, student fees, and third-stream income such as donations or contract research,” Patel explains. “If subsidies decline in real terms, then student fees increase. Surpluses are reinvested into the academic project to ensure sustainability for future generations.”

Patel points out that the higher education inflation rate often outpaces general inflation. Specialized laboratory equipment, international journal subscriptions, and research costs are usually denominated in foreign currency, leaving universities vulnerable to exchange rate fluctuations. On top of this, Wits must cover additional domestic expenses, including diesel and water tankers during load shedding and water shedding, private security around Braamfontein, and inter-campus transport.

Despite these pressures, Patel notes that Wits allocated R2.33 billion in financial aid, bursaries, and scholarships in 2024, helping over 30,000 students access higher education. Historic debt totalling R63 million was cleared for nearly 800 students. Even with these efforts, Patel admits that the University cannot cover all student costs without risking insolvency. “Free education and debt clearance require national solutions involving government, the private sector, and donors,” she says.

Even the National Student Financial Aid Scheme, meant to be a buffer against financial exclusion, has struggled to keep pace with rising costs. In February 2025, the scheme announced a 4% increase in allowances for university students and a massive 46% increase for those in TVET colleges to cushion the blow of inflation. Yet students argue that these increases barely scratch the surface in cities like Johannesburg, where rent and transport costs quickly erode monthly stipends. NSFAS itself acknowledged the pressure, stating that “where necessary, NSFAS will take extraordinary measures to ensure that NSFAS-funded students are not left stranded due to skyrocketing accommodation costs.”

For the Wits SRC Treasurer General, Liyabona Baartman, the statistics do little to soften the financial reality facing students.

“The financial barrier is tuition and accommodation together,” he says. “Take someone studying medicine at UKZN and someone doing the same at Wits. The UKZN student pays less. Yet NSFAS applies the same funding formula across the country. That does not make sense. Living in Johannesburg is more expensive than living in KZN. NSFAS needs a case-by-case approach.”

Baartman also warns that the gains of the Fees Must Fall movement are being undermined.

“Before Fees Must Fall, NSFAS was a loan. We fought tooth and nail to turn it into a bursary. That was a major gain. But now, those gains are being reversed. NSFAS used to pay the full cost of accommodation. Now there’s a cap, leaving students stranded. The inconsistency in challenging the system has allowed these rollbacks to happen.”

For Mathunyane, the numbers are not abstract. They are lived experiences: long nights balancing part-time work and studies, the constant worry of falling behind, and the persistent anxiety that debt may derail his dreams.

“I’ve survived this far,” he says. “But I don’t know what will happen after I graduate. The debt does not go away. It feels like the system is built to make you survive, not thrive.”

At the heart of the debate is a national question: who should bear the cost of higher education? Families already grappling with unemployment and inflation feel the pinch. Universities warn they cannot fund every student without collapsing. Students insist that education is a right, not a privilege reserved for the middle class.

As Patel explains, “Student funding is a national challenge and requires broader discussions and solutions.” Baartman counters, “We cannot let the gains of Fees Must Fall be rolled back. Free education is still the goal.”

Until these tensions are resolved, higher education remains both a lifeline and a financial cliff, cheaper on paper, yet still impossible for those who need it most.

FEATURED IMAGE: Graphic of Wits University the stock market prices Going up to and logos by Phenyo Selinda

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