South Africa has always been labelled amongst one of the most unequal societies worldwide and has endured persistently high levels of poverty, inequality and unemployment, even during post-apartheid. Nonetheless, there is ample evidence that human capital development, such as through university training, is one of the ways to improve the socio-economic status of the population.
Statistics South Africa’s labour survey data bears testimony to this, as the unemployment rate amongst persons with an undergraduate degree is 12% but those with a postgraduate qualification is even lower at 5% in 2026.
While a first degree can provide some degree of human resource input to the economy, the benefits are limited. Successfully thriving economies depend on postgraduate completions to enhance research productivity which, in turn, has been linked to a country’s intellectual and economic wealth. Enhanced research and innovation capability also positively impact the competitiveness of the country. Therefore, ensuring a pipeline of students from undergraduate into the postgraduate phase of higher education is of critical importance.
From a perspective of higher education planning, strategies to ensure both access to postgraduate programmes, and thereafter the successful throughput from such programmes, is important. In South Africa, two key strategic policies underpin the university sector’s planning for access and success. The National Development Plan (NDP) sets out a clear target of producing more than 100 doctoral graduates per million per year by 2030. Moreover, the White Paper for Post-School Education and Training sets a specific objective of expanded access to Higher Education, as it calls for participation rates in universities to increase to 25% in 2030 and emphasises the expansion of opportunities for postgraduate studies.
Despite the fact that those with postgraduate qualifications on average earn about R13 000 more than those with only undergraduate qualifications (R47 000 versus R34 000 in 2025 December prices), postgraduate education remains a luxury item for many, especially those coming from lower-income classes, since study fees represent a high proportion of household income.
Moreover, undergraduate degree holders are often compelled to work in the labour market immediately after graduation to support their families financially. Thus, the value proposition of postgraduate studies does not appear to be promising to a student whose family’s economic plight is more paramount in light of the rising costs of living, coupled with low levels of financial support for postgraduate studies. The net result is a detrimental impact on postgraduate enrolments which in turn detracts from the national policy objectives.
Funding opportunities (such as scholarships, grants and fellowships), are frequently the determining factor for many students in their decision to undertake further studies. The South African government has developed an extensive financial support programme for undergraduate programmes in the form of the National Student Financial Aid Scheme (NSFAS). However, financial support for postgraduate programmes is limited.
A study conducted by five UWC staff, which will be published in the South African Journal of Higher Education in June 2026, examined the impact of financial aid receipt on the 2019 (the last normal academic year before COVID-19 took place) cohort of new postgraduate students who registered for Economic and Management Sciences (EMS) programmes at UWC. A total of 623 new postgraduate students enrolled at the EMS Faculty – 186, 275, 133 and 29 registered for the Postgraduate Diploma, Honours, Master’s and Doctorate programmes in 2019, respectively.
Numerous important findings emerged from the study. Firstly, only 45.8% of the 2019 new EMS postgraduate students received some form of financial aid. This statistic is much lower than the near universal undergraduate student financial support (NSFAS aid). Out of all four postgraduate levels, the proportion of students receiving financial aid was the highest at postgraduate diploma level (50.5%) but the lowest at Doctorate level (37.9%).
Secondly, for those who received financial aid, UWC internal financial aid was the most dominant funding source (representing a 35.8% share), followed by the National Research Foundation (NRF) (a 16.8% share) as well as the Finance and Accounting Services Sector Education and Training Authority (FASSET) (a 15.1% share – mainly for postgraduate Accounting students) bursaries).
Thirdly, the mean amount of financial aid received (in 2025 December prices) was about R55 000 for postgraduate diploma and Honours students, but it was higher at R110 000 at Master’s level and R225 000 at Doctorate level. The latter two results are not surprising, given the higher levels of education and longer study duration.
Fourthly, the majority of financial aid recipients were Black Africans at all four postgraduate levels. This finding is in line with the social justice theory that the previously disadvantaged population groups represented the majority of financial aid recipients to help them overcome the cost barriers to pursue further studies.
The fifth and most striking finding is that the receipt of financial aid made the greatest positive impact on postgraduate diploma students, because 81% of the financial aid recipients eventually completed their studies, but this completion rate was 10 percentage points lower at 71% amongst the non-recipients.
Similarly, for the Honours students, 91% of financial aid recipients completed their studies, whereas the corresponding proportion was slightly lower at 89% amongst the non-recipients. When we only focus on those who completed their studies, at postgraduate diploma level, on average it took 1.51 years for financial aid recipients to complete their studies, but it took an additional semester for non-recipients to do so (1.94 years). A similar, albeit less significant finding, is also observed amongst the Honours students: financial aid recipients took 1.33 years on average to complete their studies, whereas non-recipients took slightly longer (1.45 years) to do so.
This study found that receipt of financial aid is associated with a higher probability of students completing their postgraduate studies and shorter completion time, most notably at postgraduate diploma level. The study therefore emphasises the importance of financial aid, not only in supporting access to postgraduate education, but also for enhancing academic success.
Policymakers and higher education institutions must consider expanding financial aid beyond undergraduate programmes as a strategic investment in educational equity and academic excellence. A greater investment into postgraduate funding, at a level similar to that of the NSFAS in South Africa, is clearly a strategy worth pursuing to alleviate poverty, inequality and unemployment.
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Professor Derek Yu is the Deputy Dean: Academic Planning in the Faculty of Economic and Management Sciences at the University of the Western Cape.
* The article “Funding the Future: Financial Aid’s Role in Postgraduate Choices and Success” (co-authors: Derek Yu, Shaun Pather, Rochelle Beukes, Christie Swanepoel and Ronald Arendse) will be published in the 2026 June issue on the South African Journal of Higher Education.
