Policy implementation of student accounts on credit management at selected South African universities
In the past few years, many countries have witnessed significant transformations and reforms in their higher education systems, including the emergence of new types of institutions, changes in patterns of financing and governing. In South Africa, like many other developing nations, the government dominates in financing universities. Since the enrolment in higher education is limited and most of the students tend to come from relatively financially disadvantaged families, other policy options should be considered for the exclusion of students. There had been a shift in the burden of higher education costs from being borne predominantly by the government, or taxpayers, to being shared with parents and students. This adjustment has placed a burden on universities because outstanding student accounts are increasing as a result of the non-payment of tuition fees. It is in light of these increasing expenses borne by students and parents, that universities face a challenge of maintaining higher education accessibility. For instance, student bodies have always objected (sometimes violently) to the increase in tuition fees because of the belief that the fees were escalating at a rate that might exclude potential and existing students from poorer families. The results show that South African universities are under great strain with excessive default rates of the student accounts. A fundamental concern is that the outstanding student accounts impact negatively on the financial sustainability of universities. Higher education functions in a complex business environment generating operating and non-operating revenue. Credit offered by universities to students in the way of tuition fees is different from that of a typical business. Management of student accounts receivable resulting from the revenue generating activities is crucial to the financial health of universities. To effect the early conversion of these receivables to cash and minimise credit losses, institutions must maintain efficient credit management policies for managing receivables. What should be noted is the difference in credit management strategies between institutions and from this basis, optimum credit management procedures can be identified. The aim of this study is to examine the policy implications of credit management on student accounts at South African universities. The study adopted a convergent, parallel, mixed method research design by collecting both qualitative and quantitative data concurrently, analysing both data components separately and then mixing the databases by merging the data. For the quantitative study, the data were generated from a sample involving the administration of a structured questionnaire to 1 392 senior students and document analysis at five selected South African universities. The statistical data analysis procedures utilised for the quantitative study were exploratory factor analysis (EFA), descriptive statistics, reliability and validity analysis, correlation analysis and one-way analysis of variance (ANOVA). Prior to questionnaire administration, a pilot study was conducted to improve the accuracy of the survey instrument. The collected quantitative data were analysed using the Statistical Package for the Social Sciences (SPSS), version 23.0. The analysis of the qualitative data was conducted using document analyses by reviewing and evaluating documents, both printed and electronic; thereby, interpreting to offer voice and meaning around the assessment topic. The results indicate unprecedented implementation of student credit management (SCM) policies at South African universities. Different policies communicated to students at the various universities lead to diverse degrees of effectiveness of the credit management frameworks. Recommendations on the findings were made and the limitations of the study as well as the implications for future research were outlined. This study will contribute significantly to the critical challenge facing South African universities regarding student debt. The study will be beneficial to policy makers and the implementation of a well-established credit management system, which will improve cash flow and working capital needs of the institution and preserve the future of the institution, while nurturing its development. Furthermore, the study contributes to the literature of student credit management within the South African context. The findings of this study may assist the policy makers in understanding the factors that contribute to student debt.