The Insurance mode and new organization, the response to the #FeesMustFall Protests and Plight

In light of the recent showdown by students against the continued rise in fees, Yet facing a paradox, yes, the justifiable need to increase fees by institutions to improve learning facilities, retain and hire the best talent not just at home but from abroad to remain competitive and to provide the market with the best educated students, I'd like to present the insurance model, where fees will rise yet students will eventually pay less, government will gain taxes in light of the budgetary constraints and not spend more in subsidies or funding students entirely.

Just to recap, the insurance model is suggested as the ultimate and best solution to resolve the impending semi crises/problem brought about by the ever rising cost of education and the, need to raise fees and conflicting truth that its resulting impact on the family budget is exorbitant. These are fundamental truths but are however conflicting. It is by far the best method of funding education in this day and age as the widely preferred Western debt model which only enriches the lenders yet leaving the bulk of the population with a huge debt they'd have to pay over years and years eroding the benefits it was envisioned to achieve of higher living standards and brought about by higher incomes of graduates. In truth and in summary, students still need to buy themselves a house/houses, start a family and educate that family and still pay pack the debt.

To elaborate a little more, paying into one such fund as the one in the works will ensure that at graduation students have an excess not debt i.e money they can use while looking for a job ,to start a company to pay a deposit on their house or buy a car among other things contrasted with these other methods. Also catastrophic, and reprehensible i.e not well thought out or researched, is the idea of free education funded by Government from taxes which is not free because everyone is a tax payer yet it can only benefit a few to the detriment of the country. It is not sustainable and will erode incomes, capital and total wealth that the nation has worked so hard to build. This bring us to subsidies which will require a budgetary adjustment towards this other expenditure that by design of Government and logic and the functioning of the free market, the system that has by far generated the most wealth for humanity to date, would represent a reprehensible and least efficient method of distribution of the monetary resources of the nation.

To explain the insurance model in brief, it is based on pooled risk where a pool of funds, (large funds) is used to pay for those that need it at that given time. To break it down, lets assume there are 6 million kids between 1 and 21 the age at which most kids finish their degree. Lets assume that every parent of these kids takes the eduction of their kids seriously and that they decide to join our student fund, pay premiums of up to R2000 rand per month of each child for at least 10 years. Paying R2000 monthly for kids between 1 and 21,

6 000 000 (6 million kids)would generate:

6 000 000 x R2000 rand per month = 12 000 000 000 (12 billion rands) per month per year, that is:

R12 000 000 000 x 12 = 144 000 000 000 (144 billion rands) per year

Now the 1 year olds and 5 year olds or the 10 year olds do not need their money in the near future so there is more than enough money for those in University to have their fees paid.

The rest of the money will be invested into the economy to bolster the economy and make money for the policy holders

Some people may not afford to pay R2000 per child because thats reality of life , some people drive the latest 7 series BMW or S class Mercedes, some the 5 series and E class some the 3 series and C class some the Bakkie, some can only afford second hand cars some the Camry and some go to work by taxi, thats OK, it does not mean that your kids cannot have the best education. Whats important is that a degree is a degree whether from The most expensive University, or from UNISA which is very affordable. So there is a provision to pay a R300.00 premium which is upgradeable should your income situation change

In this light, It should be understood that the goal is for the highest premium paid to be R500.00, the lowest R50 in future at which point the fund would be highly profitable and its goal of easing the burden on education expense is highly possible. It should be understood also that it is illegal in most countries to quote interest rates, returns or increase shareholder value above 25% though it is perfectly legal to achieve 1000% or more. So to stay within the confines of the law the quoted premiums will work just fine for the purposes of funding education. In this light, we only stating goals not to be interpreted as a case for competitive advantage and also This fund will be unique in that its profits belong to policy holders and will only pay its managers a management fee because it has and they have expenses to pay. This means that any unused funds will be paid back upon maturity though we'd need to asses the feasibility of paying back funds prematurely. Full autonomy on where to invest will be left entirely to the funds management company and is not revocable. The fund is owned by its management company and we are assessing how best to offer it out to public ownership. Its initial capital which will basically cover preliminary expenses will be raised via crowd funding so anyone is encouraged to invest in the fund management company... When you buy into the fund management company, you own the company that will collect premiums, pay fees for the policy holders/beneficiaries and invest the excess funds through best practice for profit to bolster the economy amongst other goals. It will charge the fund a management fee anywhere between 2% and 3% which will be its revenue and this is yet to be decided but will be based on the norm and best practice. From this it will pay its expenses e.g. rent, large workforce, water, electricity for its buildings etc. It profits will be distributed back to its shareholders i.e. the people that invested in its initial crowd funding. Shareholders of the management company i.e. the people that invest in crowd funding, will still need to have a policy and pay premiums to benefit from the fund