Funding by the National Student Financial Aid Scheme (NSFAS) increased more than five-fold in the past six years, from R5.9 billion in 2014 to R49 billion in 2022.
This according to Higher Education, Science and Innovation Minister Blade Nzimande who briefed the media on the beginning of consultations on the comprehensive student financial aid model on Friday.
“In our brief survey of student funding models globally, South Africa’s funding model is among the most advanced and generous in the developing world,” said Nzimande.
He adds that a cohort of studies conducted by his department reveal that NSFAS students perform on average significantly above the general student population.
“Today I met with vice-chancellors and principals of public universities, and technical and vocational education and training (TVET) colleges, as well as with national student leadership in both sectors. I also have a series of consultations planned for next week and intend to engage as widely as possible on the recommendations of the Ministerial Task Team [MTT].”
Nzimande appointed the task team in 2021 to construct proposals for a long-term sustainable model of student financial aid, chaired by University of Zululand vice–chancellor Professor Xoliswa Mtose.
“I am aware that, in opening up the discussions on the recommendations made by the Ministerial Task Team on student funding, the public discussion on these matters is likely to commence. This is a matter that generates significant debate and interest, given its importance to the sustainability and transformation of our public education system.”
The work of the task team was conducted in two phases: the first was to support the immediate recommendations that have been put in place for the 2022 budget; the second was to make medium to long-term recommendations for the future.
“I also wish to indicate that the MTT recommendations are under consideration by my department of higher education and training and are under discussion at Cabinet level.”
He explained that the current model designed by the MTT has financial support from National Treasury and will be in place for the medium term. This will ensure the sustainability of the model while the department is exploring options for a new comprehensive model.
Eighteen recommendations from the Minsterial Task Team
1. Government must work towards a student financial aid model that is comprehensive, providing differentiated support to students from different socioeconomic backgrounds, drawing on a range of funding sources. A 10-year plan should be established to outline how this model will be developed and changed over time, to a fully functioning, sustainable, affordable and regenerative financial aid scheme. Although it is envisaged that all elements of the plan should be in place within five years, the system may take longer to mature. The plan must outline the necessary transitional arrangements to support work towards a new model.
2. In the medium term, it will be necessary to continue with the status quo funding for students from poor and working class backgrounds, by providing adequate funding to support the fully subsidised model, while a new plan is being developed and additional diverse funding sources are identified for the comprehensive model.
3. An engagement and communication plan must be developed as part of the work towards a comprehensive student funding model.
4. A comprehensive model should incorporate loan funding options for students in the missing middle. Apart from the existing scholarships and bursaries available to these students, a fully comprehensive model must include a loan component. The proposed ideal model is a wholesale lending scheme, which draws on a range of funding sources and requires the establishment of an independent entity to manage the loans. While this is not the most affordable model in the short term, in the long term it would allow the state to provide access funding to all students who require it, and, most importantly, build a regenerative funding model which allows for funding to be returned on an income-contingent basis with the support of the tax authority. The MTT recommends that government plan to phase in such a model over time.
5. In the immediate short term, the MTT recommended that government explore the possibility of a government guarantee for commercial bank loans. This would allow for the funding of missing middle students in particular, ideally from 2023 onwards, and also test the take-up of such loans while other loan models are explored.
7. The MTT recommends that the current threshold for supporting students from poor and working class backgrounds on the fully subsidised model be retained. However, an annual inflation-linked increase should be built into the model to ensure that the threshold is not eroded over time. As part of a comprehensive model, it may be possible, over time, to provide support for students who fall outside of this threshold.
8. The report also recommends that government explore more nuanced tools for determining financial eligibility in the context of the development of a comprehensive student financial aid model.
9. As a comprehensive model is put into place, students should be able to access loan funding for second qualifications in key areas. While NSFAS continues to fund only first undergraduate qualifications, there should be opportunities within a comprehensive model for students to follow second qualification study routes or enter postgraduate studies.
11. It is proposed that, as part of the development of a comprehensive student financial aid model, government funding for higher education and training should be strategically planned and coordinated in the model. This means, for example, that Sector Education and Training Authority funding supporting students for work-integrated learning opportunities and bursary funding in post-school education and training should be part of a coordinated strategy linked to areas of scarce skill. The same applies for other government departments providing bursary funding. This may require the establishment of a national structure to better coordinate the funding available in the sector as a whole, in both TVET colleges and universities.
12. As part of the development of a coordinated strategy, a comprehensive database of student funding opportunities in the post-school education and training system must be developed.
13. The MTT recommends that the funding model of TVET colleges be changed so that tuition fees are provided to colleges through the TVET subsidy mechanism and not through NSFAS. The current model of supporting TVET college students with the tuition fee component of their studies in programmes approved at ministerial level is not efficient. This could also provide significant gains for NSFAS in improving the administration of TVET college bursaries.
15. Efficiencies in the current status quo model should be pursued actively. This includes a substantial reduction in fraud and double-dipping; strict applications of allowance limits and allowance eligibility; and efficient application of academic performance criteria. NSFAS and the department should work with other state agencies, including universities and TVET colleges, the SA Revenue Service and the SA Social Security Agency to this effect.
16. Caps on the allowance levels available for student accommodation must be put in place and must be responsive to the varying conditions and availability across different locations. Improvement in the levels of appropriate regulation of accommodation accreditation must also continue.
17. The regulation of tuition fee increases will form an important part of the development of a comprehensive funding model and should be implemented.