National Student Financial Aid Scheme & Council for Higher Education on their 2012 strategic plans

Higher Education, Science and Innovation

25 April 2012
Chairperson: Mr I Malale (ANC)
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Meeting Summary

The Committee heard the National Student Financial Aid would distribute student loans and bursaries worth R7.4 billion this year. In 2012, NSFAS would put in place a new system that would effectively cater for provision of loans and bursaries to 23 universities and 50 colleges of education. The new system would be more efficient. NSFAS would use a modern-card system to distribute loans and bursaries to students. The central application system was about improving access and building a relationship with the students. From time of application, there would be relationships with individual students rather than with universities.

The final-year programme was announced by the President. The purpose of the programme was to encourage those students doing final-year of study to successfully complete programmes. The programme had funds worth about a billion, following the top up last year, and another significant increase in 2012. Although there was a noticeable decrease in the Teacher Programme; there had been an increase in the disability grant. The Truth and Reconciliation Fund had not been utilised in the manner in which NSFAS had hoped. This Fund was meant for students, whose parents were affected by injustices of the apartheid era. The Historic Debt Relief was a once-off, and was not there this year. NSFAS’s operational budget would increase from R77 million (2011) to R157 million (2012).

Members voiced concerns on the central application system and said it needed to be clarified. This proposal could lead to a situation in the future where students would no longer be toyi-toying to the vice-chancellor’s office but straight to NSFAS. The Committee heard the central applications process had been piloted in KZN to evaluate strengths and weaknesses of the process. Once the fuller implications of the process, pertaining to cost, effectiveness and regionalisation, were understood, NSFAS would come to Parliament again. NSFAS also clarified that this did not mean that students would apply directly to NSFAS, only that the information technology would be centralised.

The Committee heard that the B-Tech was unfunded. NSFAS had been engaged with DHET and had said it would not be able to fund the B-Tech this financial year. But negotiations to try and source funding for B-Tech students were ongoing. The B-Tech had previously not been funded by NSFAS because it was post the basic diploma. It was considered by technicons to be an equivalent of an honours degree. In the qualifications framework that was promulgated by the then Minister of Education, the B-Tech was removed from the framework. The current framework did not recognise the B-Tech as a qualification although it was still offered.

The Committee heard the work of the Council on Higher Education included advising the Minister of Higher Education; ensuring quality assurance of the higher education by continually conducting institutional audits; accrediting programmes; and promoting quality assurance. CHE was now responsible for qualifications framework for the higher education and the setting of standards. There were two key weaknesses in terms of the mandate of the CHE. These pertained to the link between quality assurance, planning and funding.

The CHE would be working in the current financial year on extending the current period of degrees and diploma programmes. The poor preparation, because of the school system had been an ongoing debate. CHE would have to decide whether the undergraduate structure was appropriate or whether by extending, it could introduce elements of addressing the issue. Institutions had been asked to align their programmes in line with the
Higher Education Qualifications Framework as it was promulgated in 2008. CHE had indicated that there were still about 20 000 programmes that still needed to be aligned. That meant the programmes had to be submitted to the higher education committee for assessment. The Council could close a programme down if it felt it did not meet the required standards. CHE would conduct a review of physics; it was not national and was certainly not a review that would lead to de-accreditation of a qualification.

The Committee said there had always been tension between institutions of higher learning and professional bodies. The problem, CHE had to contend with was the recruitment and retention of its staff. The CHE could no longer compete with what other institutions offer their staff. In terms of salaries and the packages offered at these institutions, the Council could not match the institutions.

Meeting report

National Student Financial Aid Scheme (NSFAS) Strategic Plan
Opening remarks
Mr Zamayedwa Sogayise, NSFAS Board Chairperson, said NSFAS was pleased for the opportunity to engage the Committee on its budget and strategic plan for 2012/13. The strategic plan would transform NSFAS into a modern public entity that was student-centered and geared to advance the national goals. The entity looked to distribute student loans and bursaries worth R7.4 billion this year. The amount had more than doubled during the current administration.

The budget would allow the Board to increase the pool of funds available to poor students. NSFAS had for the past number of years been using an outdated system that was no longer efficient in distributing a sizeable amount of money. In 2012, NSFAS would put in place a new system that would effectively cater for the provision of loans and bursaries to 23 universities and 50 colleges of education. The new system would be more efficient. The new system would provide students with NSFAS information whilst at high school. There would be a central applications process for financial aid. He said it would be easy to establish which applicants were eligible for funding. NSFAS hoped to establish a relationship with students during the time which they applied and right through to completion of their university studies. This relationship had been with universities, and now NSFAS wanted to interact directly with students.

NSFAS would use a modern-card system to distribute loans and bursaries to students. NSFAS would recover the loans more efficiently. This would allow for better collection and analysis of student information, in a manner that was compliant with legislation and regulations. This would also assist the Board when reporting to relevant oversight structures.

The strategic plan
Mr Nathan Johnstone, NSFAS Finance Committee Chairperson, said he would share the presentation with the Chief Executive Officer and the Chief Financial Officer. The annual plan presented was for year one of the Medium Term Expenditure Framework (MTEF) period. It looked different from previous strategic plans, as it was developed according to the National Treasury framework that departments were expected to implement. The plan would, for the first time, give effect to the recommendations of the Ministerial Review Committee. One of the key recommendations was the student-centred approach to financial aid. The plan sought to ensure NSFAS was structured, governed and resourced to fulfil its role as required by the Act. Both the strategic and the annual performance plans were guided by NSFAS mission and vision. He said the mission explained why NSFAS existed and what it was that it did.

NSFAS provided loans and bursaries for students; it identified needy students and provided loans to them. NSFAS provided access and success to higher education to students from poor and working class families. This was a category of student who would not be able to pursue higher education without financial assistance. The mission was now student-centred. And the strategic outcome oriented goals all worked in support of the mission and vision. The three strategic outcome goals spoke to three issues: efficiency of the entity; access and success for the constituency that NSFAS served; and improved access to financial aid environment.

These were categorised into two programmes: administration and student-centred financial aid. Programme One was focused on internal services that NSFAS provided to Support Programme Two. These were mainly distributing money to students, and maximising recovery so that the funds were replenished. The programmes were allocated R104 million and R53 million respectively. He said the money came from retained cash surpluses that were never committed to other programmes. The loans and bursaries budget was R7.4 billion.

Loans and bursaries budget
Mr Nkosinathi Khena, NSFAS CEO, said the Scheme had divided the source of funding into three – the Department of Higher Education and Training (DHET); Department of Basic Education (DBE) and other sources. There were various categories of funding within DHET. These included: general allocations; final year programme; teacher programme; students with disabilities; SAICA partnership; Truth & Reconciliation Commission Fund; Historic Debt Relief; Further Education and Training (FET) Colleges Bursaries; and National Skills Fund.

The final-year programme was announced by the President. The purpose of the programme was to encourage those students doing final-year of study to successfully complete programmes. The programme had funds worth about a billion, following the top up last year, and another significant increase in 2012.

He said there was a huge demand and purpose for the particular programme. Although there was a noticeable decrease in the Teacher Programme; there had been an increase in the disability grant. There should not be any student with disability who struggled with funding. Society needed to inform disabled students of the funding available for university studies.

He said the Truth and Reconciliation Fund had not been utilised the manner in which NSFAS had hoped. This Fund was meant for students, whose parents were affected by injustices of the apartheid era.

The Historic Debt Relief was a once-off, and was not there this year. The FET College Bursaries had increase substantially. NSFAS also funded the Funza Lushaka Bursaries that was administered by DBE.

There were other sources of funding from other government departments such as Social Development, Labour (Ntabankulu Project) and Agriculture; Communicare; Eastern Cape Provincial government; Non-governmental Organisations; Nedbank; and Sector Education and Training Authorities (SETAs).

With the help of DHET, NSFAS was aggressively pursuing funding from the SETAs. The SETAs had contributed R99 million last year but that decreased to R76 million in 2012. NSFAS continually engaged with the SETAs and hoped there would be a change in the funding they provided.

Strategic objectives of the two programmes
Mr Johnstone said the administration programmes proceeded from a principle that said good governance was critical. The strategic objective was to improve NSFAS governance to ensure compliance with government legislation and regulations. These would need a budget of over R20 million and the target was 100% compliance. In this amount there was costing for the external audit function that was extensive and which required a significant work plan during the course of the year. This work included reviews of various aspects relating to compliance and that process fed into the external audit. He said other compliance audits were included in the amount. In the previous financial year, NSFAS had the first compliance audit in terms of the National Credit Act. These audits would continue into the future.

He said the cost also included the actual governance of NSFAS as well as some of the business transformation programme. One of the internal audits functions was focused on governance. Underpinning good governance was the need to have appropriate policies. There was a policy development process underway and 116 new policies would be developed for the entity in the next 18 months. That process had already started with performance management, human resources, supply chain, information, and governance policies. There was significant amount of work that had to be done.

The next set of strategic objectives moved away from policies and focused on capabilities. The idea was to ensure that people had the appropriate skills sets. There was a need as well to focus on IT infrastructure to better distribute the funds. The final step would be to ensure that processes and procedures were implemented to ensure smooth operations. These would have to go out to tender.

Mr Johnstone said with Programme Two there would be a shift from governance and infrastructure to getting information out to students. The objective was not to wait until students got to university before they had first contact with NSFAS. Focus would shift from university to schools with the initial contact at Grade 9 level. He said NSFAS intended using new media to get messages across.

The second objective in the student-centred financial aid programme was to ensure that the bursaries and loans were structured to meet certain needs for students. Bursary packages for disabled students were different to other students as assistance devices had to be provided for.

He said the central application system was about improving access and building a relationship with the students. From the time of application there would be relationships with individual students rather than with universities.

The next strategic objective would be to broaden the scope for the eligibility of funding. This included those students whose family income was above the threshold, or simply referred to as the “missing middle”. He said parents of these students were largely public servants who at times struggled to access private sector funding. There was a project underway to secure funding from public corporations and the Government Employees Pension Fund. This would broaden the scope of available funds.

Mr Johnstone said the objective was to recover as much as possible from employed graduates that had been granted loans. He said an important aspect of the recovery was that it was done sooner, so that the money could be ploughed back into the system for the following students.

Budget overview
Mr Msulwa Daca, NSFAS CFO, said funding of the Scheme had more than doubled during the current administration. As a result the effect on an increased budget was also evident by the increase in the operational budget expenditure. Currently there were two shifts a day, that dealt with loan applications. If funding doubled it was clear the number of applications would also double and that would necessitate additional staff.

He said there was also a need for improved computer infrastructure. In 2009 the organisation was distributing about R3.9 billion, and the increased funding necessitated a system upgrade as well. NSFAS had seen the impact of not updating its infrastructure. The organisation should ensure that it delivered a quality service to students and was able to cope with the demands of increased funding. The operational budget would increase from R77 million (2011) to R157 million (2012).

Discussion
Ms N Gina (ANC) said the approach by NSFAS to programme financial aid into being student-centred was plausible. She sought clarity about the financial instability that characterised opening of tertiary institutions. On the Committee's oversight visits, it had been established that funding came late from NSFAS. She asked for clarity on the impact the NSFAS lapses had. When these funds were paid by NSFAS the academic programme was already into the third month. How could it be done so that there was synergy between NSFAS and the academic year? When NSFAS paid the loans, students had already resorted to other means of funding. By the time NSFAS paid the money, it did not fulfil the role and the mandate the Scheme was founded for. If left like that, this would always lead to the kind of problems that embroiled institutions of higher learning, and the suffering of students.

Ms Gina wanted to know the reasons for the reduced funding availed for the purpose of teacher training. This was one area where funding had to be increased so as to ensure the quality of the educators.

Mr Khena replied that the slight drop in the Teacher bursary funding had to be seen through the Funza Lushaka bursary – administered by DBE. There was a significant rise in the Funza Lushaka, and there was also other funds from National Student Finance that had been grouped to take into consideration teacher education as well.

Ms Gina said the money ring-fenced for disabled students was not being adequately utilised. She wanted to know how much of the R33 million budgeted for in 2011 had been distributed. This was one funding that was not well advertised. What NSFAS was doing to ensure that disabled students became aware of this funding? These were the students who struggled to get through the schooling system. She asked what informed the decision to double that amount especially as NSFAS had been struggling to increase that money over the years. Ms Gina said another concern was the unwillingness to come forward and apply for funds by disabled students. Out of a possible 25 000, only 3 500 had applied and a lot of money was unused. What would NSFAS do to increase the uptake by students?

Mr Khena replied there was a strong belief that there was a number of disabled people out there, hence the raise in the funding. This was also raised by the Minister. There had been engagements with Disabled People of South Africa (DPSA), and it had indicated that there was a forum for disabled people. NSFAS was advised to make use of such a forum. In the engagement with DPSA, it was indicated that NSFAS funding did not address the specific needs of disabled people. This was a group of people that needed additional support, and in term of NSFAS mandate the scope had not been extended to fund that. This was a policy matter and NSFAS needed to engage DHET on the issue. NSFAS was out there engaging even the special schools to see how it could assist. The number of students pursuing tertiary studies from these was very low. The issue needed proper research so it could be dealt with once and for all.

Mr S Makhubela (ANC) wanted to know the conditions that were applicable for the conversion of loans into bursaries for final-year students. Was this bursary already being implemented, and if so what were the challenges? An indication had been that there were issues with the loan-bursary conversion.

Mr Khena replied that the conversion of loans to bursaries for final year students who had passed, was happening. Information was sourced from all students about those who had completed studies and those on the verge of graduating.

Mr Makhubela said there had been a challenge about upfront registration fees when students applied to institutions. These institutions did not apply the same policies when it came to dealing with NSFAS funding. How was the Scheme assisting those students who did not have upfront payments?

Mr Khena replied that there was a general agreement with institutions that NSFAS would avail 30% of its funds as upfront payment. This was intended to assist students with registration and accommodation fees. There were some universities that did not apply for upfront payment for the reason that they automatically registered those students that met NSFAS requirements for funding. He cited the University of Venda as among those that applied this method. There were inconsistencies. When NSFAS held workshops with the financial aid offices at institutions, it always raised the matter of standardisation of the process. NSFAS wanted to ensure there was compliance with policies and procedures of the bursary scheme. But this was a challenge and it was being addressed.

Mr Makhubela wanted to know more about NSFAS data integrity on students who had completed studying and were employed; and the capacity to track them down. Part of NSFAS being able to maximise collections should be based on data it had on individual students. If the Scheme relied on government methods only it would not be able to track everybody. Some students would go away without paying, especially those employed in the private sector.

Mr Daca replied that NSFAS budgeted about R18 million on the recovery of funds from debtors. Part of this amount was the cost of running the customer care centre that located people for the purposes of recovering the money.

The Chairperson clarified that the question sought clarity more on the capacity NSFAS had in tracking down students, and if other departments could be engaged in assisting with debtors.

Mr Johnstone replied that in terms of the Act there was an understanding that SARS would provide NSFAS with information of students once they became registered taxpayers. Once the student finds employment, SARS immediately notified them about the debt and would also notify NSFAS who the employer was. This was the mechanism that had been used largely up to now. Up until now the student had had a relationship with the university, and the new approach of centralised applications would foster a relationship with NSFAS. This relationship would begin from the time the student applied, and would be maintained well beyond the period of studying. The new information technology platform would make that relationship possible.

Mr Johnstone said the key to successful tracking was a relationship. NSFAS needed to start very early in building that relationship. There was no point providing students with money for four years without a relationship and only to appear once they became employed, informing them of their debt. It was a relationship rather than tracking; maintaining that was very important.

Mr Daca said once the funds had been recovered they were used to top up wherever gaps appeared in terms of funding. The recovered money was then ploughed back into the students.

Mr Makhubela sought clarity on the historic debt fund and wanted to know reasons for it to be processed as a once-off and the exact target. He asked that the Committee be reminded about this particular debt and if there were any chances of it happening again. Also had NSFAS filled all its vacancies?

Mr Khena replied that the historic debt relief was a request from a specific institution. It would not be paid in this financial year. However there was funding for historic debt and it sat with the National Skills Fund.

Mr Khena said NSFAS was trying hard to fill vacancies at Executive level. But the Scheme was faced with the challenges that all government entities sat with, of competing with private sector agencies for the skills it required. There was a challenge in attracting these people, but that was being aggressively addressed.

Mr S Mayathula (ANC) asked if a new media service provider had already been appointed to handle the marketing. The presentation suggested that a tender had been issued in February. He asked about the unfunded courses of study that the presentation pointed to developing funding methods for. He asked that the reply be contextualised in the statement that referred to sourcing of funds for B-Tech by June 2012. Students were at institutions of higher learning, why then only source funding by June?

Mr Mayathula asked for a percentage of the increased compensation of NSFAS employees in relation to the Scheme’s entire budget.

Mr Daca said compensation of employees was budgeted for R35.9 million, and that amounted for 22%, but out of the cash handled by NSFAS that percentage equalled 0.04%. During transition NSFAS relied heavily on consultants, but that had since decreased. There had been an increase in the use of internal employees. NSFAS was now engaged in recruiting its own executives instead of outsourcing the work.

Mr Mayathula asked for specific details on the Ntabankulu project. MPs came from constituencies that did not have such a project. He asked how the project landed in Ntabankulu, and if he could pull it to his own constituency.

Mr Khena said the Ntabankulu was a special project for children from the area.

Mr B Bhanga (COPE) said he also had reservations on the student-centred applications process. This was a nightmare that required extensive capacity to handle properly and especially if the intention was to broaden access. It looked as though NSFAS would have to come back to the Committee and explain this aspect in detail. Were there mechanisms to ensure that people understood exactly what was expected of them when applying? He asked if the central applications approach meant that universities were being stripped of the right to administer government funding. NSFAS should break this process down in a manner that would be understandable to Members. This approach could lead to a situation in the future where students would no longer be toyi-toying to the vice-chancellors’ offices but straight to NSFAS. He asked if this was a vote of no confidence on the ability of institutions to administer NSFAS funds.

Mr Mayathula said the student-centred approach looked similar to the Student Development Trust of the eighties. He had reservations about the approach. How soon would this happen and how exactly would communication between students and universities be handled. He asked if the Scheme was looking to regionalise applications, and if this was practical at all.

Mr Khena replied that the decision to award loans rested with NSFAS, but the Act provided for the Scheme to use universities as agents in the process of accessing funding. There was a workshop with institutions in February, where the institutions were taken through what NSFAS planned to do. A lot still needed to be done in the central applications process. There was a pilot run with DHET happening in KZN to evaluate strengths and weaknesses of the process. Once the fuller implications of the process, pertaining to cost, effectiveness and regionalisation, were understood, NSFAS would have to come to Parliament again.

Mr Makhubela asked if there was consensus with institutions on the centralisation of applications, as there were implications. Had there been engagements, especially an indication given that students would be able to apply for NSFAS funding long before they were admitted to study at a tertiary institution.

Mr Johnstone replied that with regards to central applications, a project had been piloted at five universities. Currently students could not apply directly to NSFAS, but through the financial aid office at the university. The process involved filling in an application form; the information would be loaded onto the university's Information Technology System. Then the application form would be couriered to NSFAS offices. Once the piles of applications had been received, data capturers would upload that information to the NSFAS system again. The financial aid office link would provide an interface between the NSFAS and the university data systems.

Ms A Lotriet (DA) said she was concerned by the central applications process. The experience with students, especially the first generation students, was that they were very uncertain of how university processes worked. This category of students struggled to understand how the financial aid process worked and had to be literally taken to the offices. She asked if that much care would be given to students when the central applications process was operational.

Mr Johnstone said the central applications would ensure the immediate availability of information once it was captured at university. Universities would still be able to provide guidance to students.

Mr Johnstone said there would be other channels that students could still utilise. One of the channels that NSFAS looked to using was the Post Office. Every little town should have a Post Office; students could literally walk in and get the application form and be directed to where they could get assistance. The idea was to have students apply before they could go to a university. It was key that in this process, the money followed the student. NSFAS would no longer be making allocations to universities, but rather informing them that certain students had been approved for funding. The financial aid offices at universities had a bigger role to play there. This did not mean that students would apply directly to NSFAS, just the information technology would be centralised.

Mr B Bhanga (COPE) said information on bursaries, especially the Historic Debt Fund, needed to be advertised widely on radio and television as a sizeable number of graduates were at home, unable to receive their certificates due monies owed. The other interesting bursary was the TRC. He asked what criteria would be used to award the bursary as there were many victims of the apartheid system, far too many than those mentioned in the final TRC report.

Mr Khena replied that NSFAS was working hard together with DHET in trying to get the information to students. There was a project that NSFAS and DHET were driving called Apply Now. The project engaged schools, and hopefully DBE would be roped in.

Mr Bhanga wanted to know why only the Eastern Cape province was listed among sources of funds for NSFAS. Was it only the Eastern Cape pgovernment that had a bursary fund administered by NSFAS. He wanted to know what other provinces were up to.

Mr Khena replied that NSFAS was engaging other provinces on getting them on board. Also the SETAs were engaged in this process. This had to be done systematically.

Mr A Mpotshane (IFP) wanted to know about auditing. This aspect of governance was usually monitored, and it was part of NSFAS administration. How was it monitored? He queried why there were no legal expenses indicated in the presentation. He understood NSFAS used legal consultants when there were disputes. Why was this aspect not covered in the presentation?

Mr Mpotshane asked that clarity be given on the allocated funds for training under separate divisions – staff education and policy and procedures.

Mr Daca said the appearance of training under two programmes was just an over-emphasis. The general training of staff sat with staff education; but NSFAS thought it important to further train staff on the new policies and strategy.

Mr Mpotshane wanted to know why the big jump on the allocation for business development in this year's budget (R9.8 million) from 2011 (R74.1 million).

Mr Daca replied that the jump under business development had been as a result of the transformation project. There was a lot of work that would happen around the central applications process.

Mr Johnstone replied that a significant bulk of the money under business development was not a recurring cost. It was a once-off cost that was expected to go down significantly next year. This would only be funded through the DHET grant. The bulk of the money related to the acquisition of the new information technology platform. The baseline was not changing.

Ms Gina asked about the ‘missing middle’. Those people had been suffering a lot. When would that funding be established? She asked if funding for the B-Tech programmes had been sourced and if the June deadline for implementation would be met. Those students had been suffering as well.

Mr Khena said the ‘missing middle’ had to be part of the transformation. The Committee could help in that regard by way of policy influence. There was a threshold of a R122 000 annual income. Any income more than this was not funded. The Finance Portfolio Committee was also looking to address this aspect. NSFAS was also talking to the Public Investment Corporation (PIC) to see how it could assist. Any funding source to deal with this category would be welcomed.

Ms Gina asked about the refund for students that were overcharged. Where was the process and what challenges did NSFAS encounter? She wanted to know the figure that was being budgeted for 2012/13. The Members got asked on their visits about this issue, and often struggled to provide solid answers.

Mr Daca replied that the refund project had an accrual of R77 million, and only R19 million had been refunded. With projects like these, people did not return the sms messages and calls believing they had been hoaxed. But those who had applied for refunds were in the process of getting their money. There were about 1 900 of applicants who would be refunded in the first three weeks of May. The process was going fairly well.

Ms Gina said the Committee needed further information on the smartcard system that NSFAS was about to introduce. How could this benefit, or be of value?

Mr L Bosman (DA) sought clarity on the recovery of outstanding loans especially that a substantial amount was set aside for this purpose. He asked if the money was for setting up a new system or if it was the cost of recovery. He also asked for the policy on outstanding debt, and if interest was charged.

Mr S Radebe (ANC) sought clarity on how the information system would be linked to tertiary institutions for purposes of data capturing. He asked what informed the new model that NSFAS was hoping to implement.

Mr Khena replied there was a pilot project with six universities to electronically and directly capture data, with that being immediately available to NSFAS. The intention was to rollout the pilot to all universities.

Mr Johnstone replied that there was collaboration between NSFAS IT service providers (those who wrote software codes for the NSFAS system) and ITS that was the system that the universities ran. There were technical modifications that were made on both sides so that the data could interface. The data would be captured on the university side, and through a software code, it would immediately be available on the NSFAS side. The reason this was important was for when an application had to be stopped for lack of documents; the system on the university side would flag that there was an outstanding item. Once that had been received and updated, then the application could be processed immediately. This was informed by the realistion that the availability of financial aid should be as quick as possible to a student. It was efficiency in making financial aid available to the student that was critical.

The Chairperson said NSFAS should not fear to engage the issue of the ‘missing middle’. This was the necessary intervention that was required.

Mr Makhubele wanted to know if NSFAS had budgeted enough to be able to cover all students who were exiting university on the conversion of the loan to a bursary scheme. He wanted to know when the new system was starting as it had been budgeted for. He asked when exactly did NSFAS hoped to finally leave the manual data capturing for the online service. Did NSFAS accept the “in duplum rule” on the accumulation of interest to debtors?

Mr Johnstone replied that the credit refund project specifically related to the “in duplum rule”. NSFAS would now send out statements with correct balances to debtors. Interest had been re-calculated and that process was ongoing. NSFAS was in the process of finalising documentation to the National Credit Regulator showing that compliance with the “in duplum rule” was no longer a problem.

Mr Johnstone replied that all eligible final year students who had applied for the loan had been granted. The R851 million bandied about had been allocated as loans. The process now was that each university would submit a report on individual students. The final reports would be uploaded on the university side and would appear on the NSFAS loan management system. The bursary conversion could then happen.

Mr Johnstone said the target for full implementation for the new system was the 2014 academic year.

The B-Tech conundrum
Mr Khena said the B-Tech was unfunded. NSFAS had been engaged with DHET and had said it would not be able to fund the B-Tech this financial year. But negotiations to try and source funding for B-Tech students were ongoing.

Mr Bhanga wanted to know if it was uniform that B-Tech was not funded at all universities, as there were B-Tech students who were funded by NSFAS as recently as last year.

Mr Khena replied that there was no funding for B-Tech. He was not aware of what was happening at other institutions but it was supposed to be uniform. NSFAS would be going around the country hosting workshops on standardisation and other deviations from the process. NSFAS would get its internal auditors to visit institutions.

The Chairperson said the issue was a policy matter that the Committee had to deal with. The Committee was not saying B-Tech students should not be funded. This was an issue that NSFAS needed to debate, whether to fund people upgrading diplomas into B-Tech. If some universities had that funding the Committee welcomed it because there need not be a disjuncture. This was what the Committee wanted. NSFAS needed to follow this up and see if it could play a role.

Mr Sogayise said the clarity by the Chairperson was helpful.

Mr Mayathula interjected and said the clarity was confusing further. There could only be one position whether NSFAS funded or not. Who was funding the students if the money came from NSFAS but was allocated by the university? NSFAS should know if it funded B-Tech or not; and not tell the Committee that there were universities funding B-Tech through their funds.

Mr Johnstone replied that NSFAS had agreements with a number of universities where the institutions used their money to fund students. These were referred to as institutional loans. Institutions identified the students, and would complete an NSFAS agreement form. The loan would be registered as an NSFAS loan; NSFAS was responsible for recovering the loan on behalf of the university. But the funding was actually made available by the university. There were contracts in place with all universities for this arrangement. So the universities would fund those students and the allocation came from the university’s budgets, not NSFAS.

Mr Makhubela said at a policy level NSFAS did not pay for B-Tech as it was seen as a second qualification. If there was a breakthrough, the Committee would be happy because it had been pressurising DHET for a while. A model by some university on how best to address this would be welcomed but there needed to be a policy directive. It appeared that NSFAS did not know if it was funding t, whilst it was very possible that they were.

Mr Bhanga said NSFAS was part of the confusion. There was a policy on the table and yet NSFAS entered into arrangements with universities. There were institutions where this arrangement would not have worked. There was a need for answers on this as this was happening for a long time. The audit should determine which institution had been offering this. A report on this would be highly appreciated. Policy would take long to become operational.

The Chairperson said this was a policy matter. The Committee might not decide policy, but could influence and shape it. Taking a decision on whether to fund B-Tech was for the Minister to decide. Could the Committee allow NSFAS to think about this and make a determination, as NSFAS was better placed to address this with the Minister?

Mr Mayathula wanted to know why B-Tech was not defined. His understanding was that the B-Tech was an equivalent of a junior degree.

The Chairperson said the question could best be answered in the second presentation by the Council for Higher Education.

Mr Essop Ahmed, CHE CEO, replied that the B-Tech had previously not been funded by NSFAS because it was post the basic diploma. It was considered by technicons to be an equivalent of an honours degree. It was introduced as a route for technicon students who wanted to study masters. This was the reason it was not funded by NSFAS as funding was only intended for undergraduate studies.

In the qualifications framework promulgated by then Minister of Education, Ms Naledi Pandor, the B-Tech was removed from the framework. Even the current framework did not recognise the B-Tech as a qualification, although it was still offered. The proposal was that it not be continued. The reason for its removal was that the B-Tech was not an equivalent of an honours degree.

Mr Ahmed said the proposal by the
Higher Education Qualifications Framework (HEQF) was that there would be a three year diploma; an advanced year diploma; and another year of preparation before studying a masters degree. There was a significant difference between a diploma and a degree. Another argument in the framework was that from a financial point of view, it took long time for students to get to masters level, but the contending view was that there were no short cuts to education. The funding of students should not be an issue, but the Committee needed to be aware and be prepared when the issue came to Parliament for debate.

Council on Higher Education (CHE) presentation
Mr Essop Ahmed, CHE CEO, said the structure of the new strategic plan was different as a result of Treasury regulations. The presentation would focus on the strategic goals and the work objectives that flowed from the goals. The work of the CHE included advising the Minister of Higher Education; ensuring quality assurance of higher education by continually conducting institutional audits; accrediting programmes; and promoting quality assurance.

CHE was now responsible for the qualifications framework for higher education and the setting of standards. All of this had been the responsibility of the South African Qualifications Authority (SAQA). Finally, the Council would monitor the state of SA's education.

In previous engagements with the Committee, CHE indicated it was undergoing transition but also that there had been management instability at senior levels. The internal audit done last year and the Auditor-General's audit had raised a lot of organisational challenges. This was one set of challenges that the CHE indicated that it would work on in a fairly focussed manner.

Mr Ahmed said there were two key weaknesses in terms of the mandate of the CHE. These pertained to the link between quality assurance, planning and funding. The role of the state was to steer the system using different tools that included enrolment planning; funding and quality assurance. The Department engaged with institutions on an annual basis on these. There had been a more focussed implementation of a quality assurance framework in the last five years.

Mr Ahmed said the tools had not been speaking to each other. The work that CHE had been doing in the quality assurance, especially the internal audits, did not feed into the planning and funding processes. These were issues the CHE was working on. CHE was beginning to see a change in the governance of the institution but more needed to be done. CHE had revised all its policies in the last year. Change in policy and getting staff to understand it took a while and needed monitoring.

There were four goals that CHE looked to achieve:
1 contribute to the standard of the higher education system through research and analysis;
2 contribute to the development of the qualification standard;
3 promote and conduct quality assurance in higher education; and
4 ensure effective financial administrative systems.

1.  Mr Ahmed said with research and analysis remained a challenge but the CHE looked to appoint a director to lead that area. This was where the CHE looked to improve on the advice it provided to the Minister on issues of higher education. The Minister did not have to accept the advice but needed to receive it.

Previously there had not been requests for advice but in the last year the CHE had provided the Minister with five pieces of advice. These were on an application information system; unbundling the Medical University of South Africa (Medunsa) from the University of Limpopo; the proposal to establish two new universities in the Northern Cape and Mpumalanga; the CHE's quality assurance system; and the desirability of introducing a graduate service scheme.

The Minister had asked for advice on the administering of the Funza Lushaka Teacher education scheme and the scheme in the health professions where a student had to do community service after the internship. He was providing this background information because there was a period when the CHE had lagged behind in the advice area.

Another area of advice that CHE would be working on in the current financial year was on extending the current period of degree and diploma programmes. The poor preparation, because of the school system had been an ongoing debate. CHE would have to decide whether the undergraduate structure was appropriate or whether by extending it, CHE could introduce elements for addressing the issue. There was a task team chaired by Professor Njabulo Ndebele on this regard. It was anticipated that the task team would provide a report to the CHE in the latter half of this year, and once the Council had engaged with it, advice would be provided to the Minister.

The Council had completed looking at performance indicators. This was part of monitoring and ought to have been done for a number of years. People in the public sphere did not have the basic statistical information of what was going on in higher education. CHE would produce the statistical information. There would be six booklets produced on what had been happening with the state of SA's education.

Mr Ahmed said there were four research areas that CHE was planning around. These were institutional governance (focussed on those institutions under administration or that had weak governance systems); service providers to the sector; student governance; and key policy issues raised in the audits that had been conducted.

The question ought to be what could be learned form the internal audits that CHE had produced. Why did some institutions continually have challenges of governance. With student governance, CHE was interested in two issues: the implications of disallowing student political activism and multi structured institutions. There were contestations between the central structures of the student representative councils and sub-structures.

2.  Mr Ahmed said Goal Two was the development of qualification standards. Last year CHE was revising the higher education qualifications framework to address the challenges that had been identified. The Minister then gazetted sub-frameworks in December last year. CHE was waiting to see the outcome of the public hearings that closed in March. The two main changes made to the qualifications framework was the introduction of profession programmes for a two-year diploma programme. There had been a demand for these two-year diplomas for mid-level health workers. The qualifications framework had approved these two-year diplomas that would be linked to work experience.

The second change related to post-graduate qualification for professionals. In the previous HEQF, one was bound to go the academic route to obtain honours; masters and the doctoral degree. The purpose of an academic route into post-graduate studying was largely for research and teaching in higher education. There were a number of people who wanted to study post-graduate programmes for professional reasons and not pursue academic careers.

Previously the masters’ programme was structured in such a way that emphasis was placed on the research component. People would register for the programme and only drop out after completing the coursework component. The new proposal would provide an introduction to a professional route to studying masters. Professionals would still have to do some research to attain masters, but it would be related to their field of work rather than a substantive academic research. There was a similar proposal for doctoral studies contained in the new framework. All of that was subject to the consultation process.

Mr Ahmed said institutions had been asked to align their programmes in line with the HEQF as it was promulgated in 2008. CHE had indicated that there were about 20 000 programmes that still needed to be aligned. That meant the programmes had to be submitted to the higher education committee for assessment. There were three types of these programmes and the majority were those that were referred to as category A, and required minimal changes. 12 000 of the programmes had been received in the last few months and had been processed. The process would last at least four years.

The next step would be those programmes in which between 25-30% of the programme had to be changed in order to meet the requirements of the HEQF. That would start later this year and would last up to 2013. In 2013/14 the Council would look into completely new programmes. If, for example, the B-Tech was removed, institutions would have to look into developing the advanced diplomas. CHE was fairly well on track with the HEQF alignment process.

In November 2011, CHE released a document about how the Council saw the standards setting working. The Council had received comments and was considering the final framework. CHE looked at piloting a set of standards development later this year.

Mr Ahmed said with private providers there was Higher Education Quality Committee Information System (HEQCIS). For public institutions there was a large volume of the higher education management information that was run by DHET. All public institutions had to provide very comprehensive information. This was used for the funding of higher education institutions. There was no comparison with the private system. CHE, the Department and the private providers were looking to find a kind of system that was similar to the public information system. There had been discussions with the private providers to look at the kind of information they would collect.

3.  Another key change CHE was introducing was in regard to quality assurance and the conducting of quality assurance. There had been a cycle of institutional audits that began in 2004 and completed in 2011.  This cycle focused on quality assurance in institutions and looked at policies and procedures, teaching and learning, research and community engagement. The reports received were comprehensive. The focus would be narrowed to teaching and learning for the next cycle.

CHE was rethinking this as it was not in the strategic plan. The process of conducting audits was a long drawn out process that lasted for months. By the time the report is compiled on a particular issue, the concerned institution had already fixed the problem. The delays were further exacerbated by the capacity constraints at the CHE. The proposal, although it had not been discussed at the Council, was to rethink the role of audits, and how they could be used to achieve greater impact.

Mr Ahmed said the Council expected different views from those institutions that were under administration. There was a need for the Department to work with such institutions to help them find mechanisms that would address the issues of capacity and governance. Other institutions, instead of having the five year process, might identify a set of themes in teaching and learning. This was still a fairly new idea, where institutions could be grouped to discuss a certain theme with a panel of experts. Institutions had not been engaged on this matter and they had not internally finalised it. However, CHE believed if the system of quality assurance was to have an impact on what institutions would do, then there was a need to change what was being done. This was not to say what was done previously was not appropriate, but it had to be revised.

On programme accreditation, there was not much to report on. CHE accredited all programmes offered by both private and public institutions. The number of programmes that had been accredited had been increasing. In the last financial year the Council accredited 500 programmes. CHE had increased the burden and had had to improve its system in order to do so.

As part of restructuring, the Council had reinstituted the national review standards unit. CHE was still in the planning stages, but the first national review standards would start in the new year. These were supposed to have started already with social work but that professional council had indicated that it was doing work with institutions. CHE had wanted to avoid overlaps but the issue had been discussed with the institutions.

Mr Ahmed said the Council was meeting with the deans of law next week. The Council would like to do the national review of the LLB qualification. A survey had been done on the LLB by both the CHE and the deans of law. Since joining the CHE as CEO, he had not allowed the release of that report as it was of poor quality and the methodology was not appropriate. The CHE would also consult with the Department of Justice even though it had no obligation to do so. The planning work would be done next year, with the actual review happening in 2014.

The Council could close a programme down if it felt it did not meet the required standards. CHE had been approached by the South African Institute of Physics voicing a concern on the teaching of physics. CHE would conduct a review of physics; it was not national and was certainly not a review that would lead to de-accreditation of a qualification. CHE had agreed and it would be an important pilot that could be done to other areas. That process would begin in July and would be completed before the end of the year.

CHE and the Higher Education, Teaching and Learning Association had continued to offer awards to promote teaching and learning. The academics who won the awards for the past three years had been those who came from institutions that were well established. This had necessitated a workshop with institutional managers from historically disadvantaged institutions to look at how best they could structure learning and teaching activities. Although the institutions had been participating, they had been unable to produce people who could get the awards.

CHE continued to conduct training for those people who evaluate the programmes. The Council would also continue to host workshops on best practices. It had re-established quality forums. These had not happened in a number of years. This was where CHE invited managers from both the private and the public institutions, and professional bodies to engage on issues.

The Minister had raised concerns on professional bodies, because they also accredit. There had always been tension between institutions of higher learning and these bodies, especially around what should go into a curriculum. The general feeling among institutions had been that this was an infringement on academic autonomy. The quality forums would be an ongoing process. There was an increasing concern that the academic requirement was being squeezed out of academic training by what the professional bodies thought should constitute training. Another weakness was that professional bodies fell under different areas of jurisdiction. This created the challenge coordinating.

4.  Mr Ahmed said the problem with the CHE was the recruitment and retention of staff. The CHE could no longer compete with what institutions offer their staff. In terms of salaries and the packages offered at the institutions, the Council could not match the institutions. CHE was reviewing its salary structure with a view to see if it could introduce some flexibility. The Council had looked at all the policies and within the next year it should be compliant.

CHE collected income from the private providers that it helped with accreditation. Starting this year, the Council was charging what it thought was a cost recovery fee for conducting an accreditation. The interest income was reducing. The only interest that CHE got was from the funds allocated. The Council had no reserves and its funding was depleting.

Discussion
Mr Mayathula said he wanted further clarity on the issue of B-Tech. He asked who made decisions on the status of qualifications, especially that technicons recognised the B-Tech as postgraduate against the CHE's that it was not. This caused further confusion as there appeared to be two government entities – NSFAS and CHE - with opposing views on how to regard a qualification. He asked if in the view of the Council, diplomas were regarded as of the same level with junior degrees.

Mr Ahmed replied that from a funding point of view, the B-Tech was funded separately by the Department. It was regarded as a second qualification as opposed to a post-graduate qualification. There were some institutions who registered students automatically for the programme and claimed funding. But the Department put a stop to that and required that students apply to be enrolled for the B-Tech. Institutions were using the system in order to generate a larger slice of the funding. The B-Tech had always been regarded as a subsequent qualification, and that was why NSFAS did not fund it. In terms of the qualifications framework that was promulgated in 2008, the B-Tech was removed as a qualification. It was still offered; because the framework had a clause that said the Minister would determine the formal date on which to discontinue the programme. That had not happened yet. He expected this decision would be made after the current revised framework. For now the B-Tech continued to be offered by the universities of technology. Even in the revised framework, there would be an issue regarding funding of the advanced diploma by NSFAS. This was a policy issue with regards to NSFAS.

Mr Mayathula said NSFAS made the claim that disabled students required more funding, but because of policy it, as a funding scheme, could not do so. Who determined policy? This statement made him uncomfortable.

Mr Ahmed replied that two years ago, the disability grant was not utilised completely. This had a lot to do with whether it was communicated widely. There were serious forms of disability that institutions could not address, and the Council had not found mechanisms for how this could be addressed. The allocation for special needs, could have been a reference to the additional services that students required like Braille or interactive computers in the case of blind students. This was a policy decision that NSFAS could make with the approval of the Minister. There was nothing stopping NSFAS from doing so.

Mr Radebe wanted to know the alignment of strategies with DBE on the review of physics.

Mr Ahmed replied that the outcome of the review of physics would determine if the challenge of teaching of physics was linked to the schooling system, and that would be taken up at that point with DBE.

Mr Radebe asked about the retention strategies, in light of what the Committee heard the previous week that professors earned far less than the students they produced, who worked in the public sector. This had the negative impact that money was more important than education, and the role one played in society.

Mr Ahmed replied there was a major challenge in producing the next generation of academics and researchers. The scholarships offered for students were too low. Salaries of professors were too low, considering that producing an academic took about ten years. These were people who could earn huge sums at entry level in the public service. There was no incentive for African students to remain in the academic sphere as they made more money in the public service. There was a challenge in society on how it compensated people in what they did. He would not entertain the impact this had in society; there was a problem when it came to the next generation, but it had not reached crisis levels.

Ms Lotriet said the role played by CHE was very important. She was once party to the proceedings of the Council on quality assurance reviews while at university. These were very thorough. She was concerned by capacity constraints and wanted to know where the shortfall was on staff complement.

Ms Vuyokazi Matsam, CHE Director: Corporate Services, replied that the Council had been working on a number of options in trying to attract or retain skilled people. One of those was the seconding of staff from institutions to come and assist at CHE. The staff complement at CHE was 54 and 12 of those were unfilled. A decision was taken to put six out of the 12 on hold, due to the additional staff required for the audits. She said the Council was in the process of filling the other six.

Mr Mark Hay, CHE Executive Director: Corporate Service, replied that CHE was a knowledge based organisation. The most significant challenge was retaining highly qualified people in quality assurance, who understood higher education.

Mr Bosman asked for specific details on the nature of advice CHE provided to the Minister on the feasibility of the two planned universities. He asked if a study was conducted on the availability of academics, the size of the universities and independence or whether these would collaborate with existing institutions. In Mpumalanga there was an Agricultural College with the potential to be expanded. He asked if that was taken into consideration.

Mr Ahmed replied that the Minister had established two task teams for the Northern Cape and Mpumalanga and those had done detailed feasibility studies. He was reluctant to say what CHE's advice had been, as the report had not been made public. But in Mpumalanga the report looked at the entire infrastructure (Tshwane University of Technology campus; Lowveld Agricultural College; a Nursing College and the Bela College). The proposal indicated that there was sufficient infrastructure in Mpumalanga, but it would require administrative offices in order to manage university affairs. The existing infrastructure was certainly looked at. From the perspective of CHE, there was a need to finalise the issue of administering agricultural and nursing colleges. These needed to be placed under DHET. The current structuring of the system was not helpful, because these colleges could be used as part of the post school system. The institutions collaborated with existing institutions.

Mr Bhanga wanted to know how CHE monitored the status of qualifications from different institutions. There was an impression created that qualifications from certain institutions carried more weight than others. This was evident when one studied at a historically disadvantaged university and wanted to study further at one of the well resourced institutions. The tendency was to assess those students. He wanted to know if the Council could ensure qualifications were treated at the same level.

He asked if as part of the mandate, CHE monitored universities accordingly on the images they propel of themselves. All universities wanted to be seen as the best transformed, excelling and academically progressive. To what extent were these institutions' through-put consistent with their vision and mission.

Mr Ahmed replied the decision on monitoring on an annual basis happened through the Department enrolment process. The Department monitors on what the ministers agreed on from a funding point of view. There had to be greater synergy between CHE and DHET in light of the audits. This had not been adequately addressed; there had been challenges on both sides.

Mr Bhanga wanted to know who was supposed to act on institutions that did not comply with the law on student governance. Who could parties report to when denied an opportunity to participate in student mobilisation?

Mr Hay replied that monitoring the institutions was part of the Council's responsibility. How universities viewed each other's qualifications was part of an ongoing problem. This was a debate that was needed in the country especially by the Qualifications Institute of South Africa (QISA). Every university had its own regulations and could set its own admission requirements. It was very difficult for the CHE to intervene in such instances. This was not the challenge only in South Africa, but internationally, particularly when dealing with issues of institutional reputation. This was where the qualifications framework came in; to say all institution meet certain requirements in all of the programmes. If the Council could assert that, there would be a strong case to confront universities that rejected students from certain institutions.

Mr Ahmed replied that institutions had statutes that defined governance. In the statute there would be provisions for student mobilisation and governance. The statute got approved by the Minister. If there was a challenge with certain groups hindered in student politics that was a matter that could be addressed by the institution. If it was a bigger issue, it would require intervention from the Department.

Mr Makhubela voiced concerns at the amount of work that faced the Council given its financial resources. He was glad that the national review directorate had been revived but it was concerning that the funds available were limited, and not to operations. He noted that the Council had up to so far conducted three reviews out of a possible 17 that appeared on the presentation. He described this a serious problem, and wanted to know if there was a creative mechanism that could be employed to get the reviews done in a short space of time, as a opposed to eight months at a price of R2 million. He asked if there was a challenge in engaging the private sector in order to raise funding.

Mr Ahmed replied that the budget problems for national reviews that had been identified would be less of a problem because not all of the posts had been filled. The expenditure statement had not been done, but CHE anticipated savings, and that would be rolled over, allowing for some reviews.

Mr Hay replied that the 17 referred to site visits and not to the reviews to be carried out. The quality assurance system was largely run on a peer-based model. Over the next three years, the Council would conduct two to three national reviews consisting of a number of visits by different CHE teams.

Mr Makhubela asked for clarity on the irregular and wasteful expenditure on the audits.

Mr Ahmed replied that this did not refer to any act of fraud or corruption. The Council was expected to report the scope of any irregularity to Treasury.

Mr Makhubela said there was frustration about the Recognition of Prior Learning, and institutions had their own attitudes on this. This was done in agreement, and yet institutions did not implement it. He asked what would CHE do to attend to the problem.

Mr Ahmed replied that there was nothing that stopped institutions from using RPL. Institutions had something called Senate discretions. There was nothing in the regulations stopping any institutions from taking a veteran learner. The institution might want to do a diagnostic test to determine the level of study he could be admitted to, but that learner did not have to do a matric. In terms of the current matric regulations, if one was under 23 one had to meet certain requirements. Once one was over 35, one did not even need an undergraduate degree to study for an honours degree. The problem was with the institutions and not the regulations. RPL was complicated because institutions did not have the capacity to evaluate applicants wanting to enter the system with a portfolio as opposed to formal schooling. A research group had been establish to determine the challenges.

Closing remarks
The Chairperson said the Committee accepted the budget and the plan. The Council needed to think of addressing the issue of professor salaries and the funding that was availed to doctoral students. This needed to be addressed together with other stakeholders and at a higher level. To assist that process would require preparedness on the part of the Council, particularly around benchmarking internationally. The debate should not be left there.

The meeting was adjourned.

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