Johannesburg - The Heher Commission into the Feasibility of Fee-Free Higher Education and Training has found that there is currently no capacity for the state to provide free tertiary education to all students in the country.

"…There is insufficient financial capacity in the state to provide totally free higher education and training to all who are unable to finance their own education, let alone to all students, whether in need or not," the executive summary of the commission’s report said.

Zuma released the much anticipated report at around 12:30 on Monday.

- See the report here.

The release comes after Zuma was reportedly preparing to announce a plan to introduce fee-free tertiary education, which Morris Masutha, the apparent ex-boyfriend of his daughter, had allegedly devised.

Zuma’s reported plan was to find R40bn within the constrained budget to fund a free-education policy for families who earn less than R350 000.

The president said in his statement on Monday that the Inter-Ministerial Committee on Higher Education Funding led by the Minister in the Presidency Jeff Radebe, and the Presidential Fiscal Committee, led by Finance Minister Malusi Gigaba, were "processing the report".

"I will make a pronouncement on the report once the ministers have concluded their work. I have decided to release the report prior to the conclusion of our work in processing it so that the public can have an opportunity to study the report while we continue with the processing thereof."

The report recommended that undergraduate and postgraduate students studying at both public and private universities and colleges, regardless of their family background, should be funded through a cost-sharing model of government guaranteed "Income-Contingency Loans" sourced from commercial banks.

The commission recommended that through the model, commercial banks issue government guaranteed loans to students.

This would mean students would have to pay upon graduation and attainment of a specific income threshold.

However, should the student fail to reach the required income threshold, government bears the secondary liability.

The commission has also recommended that the existing National Student Financial Aid Scheme (NSFAS) model be replaced with the new Income Contingency Loan system.

The commission further recommend that government considers the introduction of a university fee capping mechanism.

"NSFAS was unlikely to produce a significant proportion of successful students or to improve materially on its present gross inefficiency in the collection of loan debts."

According to the report, South Africa needed to improve its Technical Vocational Education and Training (TVET) sector to benefit the economy.

"TVET colleges must become institutions of first choice rather than the holding position of second-class citizens as is presently the case."

The commission has also recommended that TVET education should be fee-free for all and that stipends be made available, where needed, to cover the fully cost of study.

The commission has also recommended that government increase its expenditure on higher education and training to at least 1% of the Gross Domestic Product.