Most governments provide some public education and must choose how to finance it from fiscal transfers and user fees. I study how a nationwide shift from partial user fees to pure fiscal transfers changed secondary school education outcomes in South Africa. Fee elimination increased enrollment in early grades of secondary school, leading to larger classes and more part-time and temporary teachers. Potentially due to this shift, fee elimination decreased both grade 12 enrollment and graduation exam passes. This demonstrates that demand-side subsidies without supply-side investments may have limited or even negative effects on education participation and attainment.