"The Commission recommended that Government must further investigate the viability of online and blended learning as an alternative in addressing the funding and capacity challenges facing the current higher education and training sector", the report states.
After three months of delays, denials and speculation, President Jacob Zuma has finally released the Fees Commission Report on the feasibility of free tertiary education in South Africa.
South Africa's High Court reinstated the 783 charges a year ago and the Supreme Court upheld that decision in October, rejecting an appeal by Zuma.
The report details that loans won't just be repayable to government.
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The report says evidence from other countries shows economic benefits when the emphasis of higher education is on "producing technically qualified, work-oriented "graduates" in numbers which outweigh those of university graduates".
There is now no capacity for the state to provide free tertiary education to all students in the country, the report has found.
Instead, the Commission recommends state-guaranteed loans for university students, to be paid back only when a graduate reaches an acceptable salary level.
It followed nationwide protests by students using the hashtag #FessMustFall.
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The Heher Commission said TVET colleges must become institutions of first choice, rather than holding second class positions, as is the case now as they are of benefit to the economy. The commission also recommended that all students at these colleges should receive fully subsidised free education in the form of grants that cover their cost of study and that no student should be partially funded.
The Commission recommended for the application and registration fees to be scrapped across the board.
The commission has recommended that government find some affordable means of providing student accommodation, which has been another Fees Must Fall concern as many students have struggled to afford accommodation.
To implement this model, the commission recommended that the existing National Student Financial Aid Scheme (NSFAS) model be replaced by the new income contingency loan system.
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"The President waited for the Commission to conclude its business", the presidency said in a statement.