While education is universally recognised as a key driver of economic and social progress, local education spend and specifically consumer investment in this space is a good indicator of the health and growth potential of the sector.
It also sheds light on spending priorities and hard choices. With the past five years seeing both massive disruption and innovation in the space, local data through this period is telling. As education costs increase, affordability is decreasing. Were also seeing a corresponding re-evaluation of career paths in line with future employability. Dumisani Sibanda, Fundis Executive Head of Strategic Projects, explains.
The past five years have seen a massive shift in how and what we learn. From how individuals engage with learning material, to what, when, where and why they learn, the sector has been fundamentally and forever changed. While many of the disruptions experienced, and their corresponding solutions, can arguably be tracked back to Covid-19, most of these shifts and evolutions where already in play, says Sibanda. Covid-19 merely fast-tracked and multiplied them in a comparatively short space of time.
He notes that beyond the rise of digitisation, AI and online learning, one of the most significant trends over the past five years has been the steady increase in the cost of education. Private school fees, university tuition and associated costs such as textbooks, transportation, and technology have all seen significant hikes: Between 2018 and 2023, private school fees have increased at an average annual rate of 7 10%, outpacing inflation. This has placed a growing financial burden on families, leading to a re-evaluation of education choices; many of them in terms of studying post matric.
Tertiary education has similarly not been immune to these increases. University tuition fees have risen, particularly in fields such as medicine, engineering, and business, which are in high demand. The cost of living for students, including accommodation, study aids and equipment, as well as food and transport, has also escalated, further stretching family budgets, says Sibanda. This can clearly be seen in Fundis own data over this five-year period, where loans are being structured differently. In 2018 for example, a typical tertiary loan saw 90,7% of the total loan amount allocated towards fees, with just 6,0% and 2,3% towards a laptop/ equipment and accommodation respectively. In 2023 however, only 72,2% was allocated towards fees, with 23,2% and 4,2% now committed to laptops/ equipment and accommodation.
