Student-centred fees model & outstanding allowances: progress report by NSFAS, DHET, USAf, SACPO, SAUS, SAFETSA; with Minister

Higher Education and Training

30 May 2018
Chairperson: Ms C September (ANC)
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Meeting Summary

The Committee was briefed on progress in the roll-out of the National Student Financial Aid Scheme (NSFAS) student-centred model, and the payment of outstanding allowances to students. The entities which provided details of the wide-ranging challenges they faced, as well as recommendations to resolve troublesome areas, were NSFAS, the Department of Higher Education and Training (DHET), Universities South Africa (USAf), the South African College Principals Organisation (SACPO), South African Further Education and Training Students Association (SAFETSA) and the South African Union of Students (SAUS).

The student-centred model received both support and criticism. The consensus was that the model should remain, but it needed to be changed and improved. Importantly, collaboration and partnerships were needed among all relevant stakeholders. Communication was one of the biggest concerns expressed by almost all of the entities. The lack of communication primarily occurred between campuses and NSFAS. SACPO had been confused about the interpretation of letters pertaining to the allocation of funds, although the Minister and NSFAS insisted the meaning had been clear. Everyone agreed that the problem around the allocation of funds needed to be addressed, as this had resulted in students not being able to pay for accommodation and food, and eventually to protest action and the burning of property. Ultimately the student-centred model was meant to serve students, particularly those from poor and working class backgrounds.

There was disagreement among Members of the Committee as to what the real issues were that needed to be dealt with. One assertion was that NSFAS had not been disbursing money to students, while other Members felt that communication and the accountability of institutions were bigger issues. They referred to the need for integration of data and the lack of communication between students and NSFAS They agreed that the burning of property was unjustifiable. The recommendations provided by the entities were commended.

Meeting report

Chairperson’s introduction

The Chairperson said that at the previous meeting, the Committee had dealt with the annual performance plan (APP) of the National Student Financial Aid Scheme (NSFAS). It had taken a decision that it would not see NSFAS on its own, but with all the other role players. When it undertook oversight, one of its concerns was the welfare of students. Individually, all the different role players had different ideas on certain issues. Therefore, this meeting would encompass all the relevant role players to discuss progress in the roll-out of the student-centred model and the payment of outstanding allowances to students. There should be nothing that stood in the way of learning and teaching.

Student Funding Matters: DHET briefing

Dr Diane Parker; Deputy Director General: University Education, Department of Higher Education and Training (DHET) described the implementation of the student funding cycle for 2017/18. Universities and technical and vocational education and training (TVET) colleges had allowed NSFAS-qualifying students to register and commence studies. Many returning students and some first-time entry students had received allowances as a result of upfront payments. However, finalisation of funding confirmations, bursary signing and disbursement had not yet been completed for the 2018 academic year. There had been unacceptable delays, despite upfront payments. These delays were being managed. Furthermore, NSFAS had provided additional payments.

There were problems with the “student-centred” model. These involved serious deficiencies in the systems, business processes and the capacity of NSFAS, and sometimes at the institutions. There was difficulty in managing concurrent processes and proper integration of data, as well as co-dependency of different processes, including data integration between NSFAS and institutions. There had been delays in disbursements as a result of difficulties in finalising funding decisions. Policy changes as a result of the 2017 Presidential announcement had required some system changes. Policies would be drafted in the next two months. Differences between allowances of first-time entry and senior students had been managed through collaboration with student bodies.

The Minister had met with NSFAS’s senior management and had held a press briefing on 24 April 2018. She had written to the board of NSFAS on 3 May. There was a development support team of university and TVET staff with Department representatives at NSFAS, from 15 May to speed up and resolve information technology (IT) and capacity challenges.

Progress had been made with integrating registration and funding eligibility information, though it was not yet complete. NSFAS bursary agreements were being generated and signed. Payments from NSFAS had not started, hence the need for further upfront payments to universities. Development support teams were working with NSFAS to ensure the disbursement process was concluded urgently.

The next steps would be for the DHET to conduct a full assessment of all NSFAS systems and business processes, commencing in June. Time frames for a full assessment would overlap with the commencement of 2019 funding cycle. A plan for the 2019 cycle, from application to disbursement, would be developed in consultation with the universities and TVET colleges, the DHET and NSFAS.

NSFAS challenges: USAf briefing

Professor Ahmed Bawa, Chief Executive Officer (CEO): Universities South Africa (USAf),  said that the former President’s announcement on 16 December 2017 had left just two to three weeks for the DHET, NSFAS and the universities to put in place new systems. Historic debt had presented a major barrier to students. There were unsigned 2017/18 loan agreement forms. On the one hand there were students who had signed these forms and on the other hand, universities were not issuing these forms to be signed. Uncertainty about sustainability was a problem. The roll-out of pilots of the student-centred model had led to a change in structure which had complicated the problem. There had also been a leadership turnover and a strike at NSFAS.

The student-centred model was clearly not student-centred. It was a great idea that had not worked. It was a technology system that was sadly unable to play the role envisaged by it. It needed a new and redesigned financial aid ecosystem that worked for students.

Three upfront payment tranches had been paid over. Upfront payments were meant to allow universities to manage their cash flow at the beginning of each academic year in lieu of tuition and student accommodation fees. Universities were not equipped to play the role of banks --although they did.

Prof Bawa concluded that there needed to be collaboration and a two-phase approach.

Student-centred model: SACPO briefing

Mr Sam Zungu, General Secretary: South African College Principals Organisation (SACPO), focused on issues that had not been discussed by the previous two entities. He agreed with Professor Bawa regarding the student-centred model. The model was supposed to be creating a conducive environment for students and teaching/learning in higher education institutions. The main challenge was the delayed payments by NSFAS.

In clarifying the upfront payments, he noted that there were some contradictions. A letter dated 6 April 2018, signed by the Director General, referred to the application of NSFAS funds to TVET colleges, and stipulated that these funds should not be utilised for the payment of allowances at all, but rather for other purposes. When colleges received this letter, it was extremely difficult to disburse any money for allowances, in contradiction to what the letter directed. Furthermore, it was difficult for colleges to dispense allowances when they did not have a list of provisionally approved students. A second letter, dated 8 May confirmed the first letter, emphasising that the money sent was not meant for allowances.

He appreciated the efforts of NSFAS in setting up offices at Ekurhuleni West College to address the challenges of the 2017 academic year. However, progress had been slow because of challenges not addressed in 2017 and 2018. SACPO was not certain whether students were being funded.

The issue of the historic debt in TVET colleges had not been addressed. The biggest issue was communication between the colleges and NSFAS. The student-centred model was meant to provide communication between the students and NSFAS. When students were meant to sign Schedules of Particulars (SOPs), a message was sent to students and not colleges. Sometimes messages were sent through cell phones which were prone to errors, where students sometimes did not see the message. This caused further delays. When the students communicated with NSFAS, sometimes the college gave different information. The college management was always seen as wrong. There had been a case of this in the Free State, where the principal had been blamed.

He did appreciate the student-centred model, but wanted there to be a reflection on ways that the model and its capacity could be improved. SACPO did not believe the model had the capacity to carry the required load. A small number of colleges did not have money for food and accommodation, which created a burden on the colleges and the people providing these services.

SACPO understood the challenges NSFAS faces. Within the colleges themselves, the DHET had invested money by setting up financial aid schemes and the employment of chief financial officers (CFOs) in specific colleges. In any event, although there was hope that NSFAS would disperse these allowances, in certain instances this did not happen. Colleges again had the burden in this regard.

Ultimately SACPO accepted the student-centred model, but it was not working at the moment.

Challenges of fee-free education: SAUS briefing    

Mr Sibusiso Thwala, National Spokesperson: South African Union of Students (SAUS),

said that after the announcement of the introduction of fee free education for first time entering students, and subsequent roll out to second and third year students, the Minister’s budget speech had acknowledged that the budget for higher education was R89.9 billion. The major components were university transfers (R38.6 billion), NSFAS (R20.5 billion), skills development (R16.9 billion), TVET colleges (R10.7 billion) and Community Education and Training (CET) colleges (R2.3 billion).

The main advantages that students had welcomed with the rollout of fee free education and upfront payments to universities were:

  • Many first-time entry students from families with an income up to R350 000 per annum were eligible to apply for the new DHET bursary;
  • The bursary scheme would not be a once-off that would end in 2018, but would be rolled over for five years, inclusive of other requirements such as academic performance;
  • The conversion of NSFAS loans into a bursary for returning students, was welcomed and appreciated by students;
  • Government planned to increase the subsidy from 0.68% of gross domestic product (GDP) to 1% of GDP over five years in progressive stages, and confirmed SAUS’s submission to the fees commission that the government subsidy must increase.

The following challenges were experienced in relation to both the roll out of fee-free education and the allocation of upfront payment for 2017-2018:

  • Universities had increased fees, and these increases meant that a huge amount of the upfront payments to fund fee-free education was being consumed by the exorbitant fees being charged by universities.
  • Private accommodation costs had increased drastically, so that huge sums of student allowances got channelled to fund exploitative private landlords.
  • Poor communication led some universities to exclude deserving students who fell under the provisions of this new government funding.
  • Delays in the release of the upfront payments to universities caused students to starve and to be evicted from their private residences, because these residences demanded payment timeously.
  • The criteria used to determine students who earned below R350 000 was difficult, and almost excluded some of the poor students.
  • Continuing students revolted against the fact that only new students were taken care of by the new DHET bursary under fee-free education.
  • The demand for higher education had increased because many students were able to come and study for free. This meant that with limited spaces available in universities, many students ended up being closed out due to the huge influx of students.
  • Students were not signing agreement forms under first-time entering funding. NSFAS had generated 37 893 agreements for new students, but only 5 063 had been signed, meaning the process was very slow.

The South African Union of Students acknowledged the progress made in relation to the commitment by the government to provide free quality education for the poor and for all the students. It was determined to continue pursuing the struggle to ensure that students would benefit in numbers from the long-protracted struggle for free education. This was part of other struggles it engaged in, which included gender and transformation, the provision of adequate decent student accommodation, and the decolonisation of higher education.

Student-centred model proposals and challenges: SAUS submission

The student-centred model had been introduced in 2016 as a new process of administering the NSFAS. It was received by students with mixed reactions, because some sections believed that the new model would help address a number of challenges that had been bedevilling the scheme over the years. On the other hand, it was later viewed as a failed model with a lot of loopholes and problems. The system was meant to help correct past mistakes and challenges, which included.

  • Eradication of corrupt activities that were happening at universities, whereby funds were looted or allocated to undeserving students while deserving students suffered. Funds were being diverted for other uses while students were starving on campus.
  • Elimination of poor processing of financial aid at universities. It appeared to be a refreshing model that was going to help address the problem of maladministration that was being witnessed at institutions of higher learning,
  • The new model was seen as an alternative that would relieve students of the need to repeatedly apply for NSFAS aid every year. It was going to reduce administrative nightmares accompanied by a lot of repeated collection of the same documentation every year. One would apply once for three years of study.
  • The new model was also regarded as a cost saving model that would help students and universities to reduce the costs associated with applications and the administration of NSFAS.

However, the new model was at a later stage rejected by many students as a huge failure and worse than the first administrative model used before because of the following challenges they encountered:

  • The NSFAS process was taken away from all universities’ financial aid offices, and this left a vacuum between NSFAS-funded students and their respective institutions.
  • The centralised system created communication gaps between the students and NSFAS.
  • There was massive rejection of deserving students. SAUS received complaints, especially from historically disadvantaged universities, about students who would have qualified for NSFAS in previous years but were rejected now under the new dispensation. The rejection of poor deserving students made the new student-centred model questionable.
  • The appeal process was not clear and was accompanied by delays, causing disillusionment, dismay and hopelessness amongst the students. There were students whose appeals had not yet been responded to, up to today. SAUS was questioning the fact that NSFAS administrators, to whom one applied, were also the adjudicators of the appeals -- it was not fair to be a referee and a player at the same time.
  • There were unprecedented delays in the releasing of student allowances. SAUS had noted the two circulars that were released by the NSFAS offices on 23 April and 8 May regarding 2018 allowances. However, the university students found discomfort with point in 2 the circular which stated:

Those universities whose 2017 allowances (books, meals and transport) were already at the level or above the 2018 First Time Entering Student (FTENS) notional allowances, must keep the 2018 allowance at the same level as 2017. This would ensure that the current disparities in notional allowances for senior students between institutions were addressed and to gradually, over time bring senior students allowances in line with FTENs.”

This was a problem because VAT had been increased and the cost of living was high, but allowances remained the same. SAUS did not see logic in this, other than a concerted effort to starve students.

  • Responses were deliberately delayed so that students became unnecessary frustrated. Students applied for NSFAS in November for the following year, but got responses in April the following year, while others were still complaining up to today that NSFAS had not yet responded to them. It meant students studied the entire first semester without books or book allowances and without food and transport, which to SAUS was a recipe for academic failure.
  • The debate around Intellicard and sBux led to unnecessary frustration among students, considering the change had come without proper consultation. While sBux had an advantage of cash back which students could use for other basic necessities, such as transportation to go home, Intellicard gave more variety for purchasing food. Students had rejected the proposal from NSFAS to introduce sBux because it required airtime for students to access the voucher. Airtime was an unnecessary and unaffordable cost to students. Student representative councils (SRCs) were not comfortable about using Standard bank, but rather Intellicard.
  • There were limited options for purchases and dealers. It seemed the new model came with limited options for students to choose items to purchase and items not to purchase. Students always wanted unlimited options to use their allowances.
  • Post-graduate students were excluded by the processes that came with the new model. The assumption was that the new model, because it had additional funding, would include post-graduate students. As a result, few students were willing to pursue post-graduate studies due to the lack of funding.
  • Historical debts continued to be a problem, which the new model was silent about. Students who qualified for NSFAS in previous years but had not received funding, still owed universities and their results were still withheld due to this historical debt. The new model was trying to provide a new solution without addressing the old problem.

Proposal for improvements

The following were key and progressive proposals that SAUS was outlining to handle the NSFAS crisis:

  • Introduce a new operating model that was aligned to systems of universities -- a model that was inclusive and not exclusionary.
  • Decentralising the NSFAS system would help to improve the process of applications, and the processing and allocation of funds. This would lead to more efficiency and effectiveness on delivery. Financial aid officers must equally share the responsibilities with NSFAS administrators
  • Urgently start stakeholder engagements with all SRCs, financial aid management and vice chancellors to craft the meaning of the new “Free Education” going forward, and gain more insight on new ideas that could help rescue the situation.
  • Implement a debt relief model to clear historic debt for drop-outs, continuing students and graduates.
  • Inclusion of post-graduates in the funding provisions would assist in ensuring the formation of a single coordinated higher education that would produce adequate and relevant skills for meaningful socio-economic development.
  • Allow universities to increase allowances based on the conditions of their environments and the regional economic set up. This would defeat the challenge of starvation at universities.
  • Mobilisation of more funds for students from the private sector to supplement government intervention. This would assist the scheme to fund more students. The problem with NSFAS was that it relied solely on government for funding without looking outside the box. A team of experts and stakeholders in the higher education sector could be formulated for financial mobilisation to increase NSFAS funds.
  • Funding dates must be aligned to registration dates, so that immediately a student concludes registration, he/she receives allowances from NSFAS. Appeals must be handled on campuses as soon as possible.

The NSFAS processes and their failure so far had been the main causes of student protests over the years on campuses. The 2018 academic year was supposed to be smooth, but protests had been witnessed again due to the NSFAS challenges, as outlined above. This year, engagements and consultations with SRCs and SAUS had been very limited or avoided, as such challenges had continued to increase, leading to chaos on the ground.

SAUS wanted to see NSFAS have smooth processes one day, where students would not complain about delays or denials when all was done well. It looked forward to seeing meaningful change with regard to the student financial aid scheme

NSFAS student centred model: SAFETSA presentation

Mr Yorke Twani, President: South African Further Education and Training Student Association (SAFETSA) provided insight into the challenges experienced at TVET colleges with the allocation of 2017/18 upfront payments.

He said the upfront payments which were meant for registration and urgent cases with regard to allowances, were being utilized for college operational costs in some institutions, and this had resulted in student unrests and poor attendance by students. As per the DHET bursary rules and guidelines, (page 10, paragraph 21), the upfront payments to colleges were meant for registration fees and allowances. There was no mechanism to address these problems. The TVET colleges had received their upfront payments to cover registration and allowances for deserving students, but the students were not yet paid their allowances and this had resulted in student unrest, poor attendance and student drop-outs. SAFETSA supported an 80% attendance rule. There was no mechanism by NSFAS to monitor the college utilisation of upfront payments. This allowed corruption to happen.

At the beginning of the 2018 academic year, colleges had demanded upfront registration fees from students and had contravened section 9, paragraph 21 of the DHET bursary rules and guidelines on the exemption from paying registration fees, and this had led to the exclusion of students from getting access in TVET colleges. Colleges that were on sBux system were unable to disburse allowances using the upfront payments. The delay of academic results also made it difficult for some institutions to disburse the upfront payments to deserving students.

Mr Twani described the challenges experienced with the roll-out of the student-centred model, saying that SAFETSA’s understanding had been that the phasing in of the model was a mechanism to minimise the maladministration of NSFAS funding, and to serve as a catalyst with regard to the delay in student allowance payments. However this understanding was wrong, because this system was disadvantaging students, particularly those who were from rural institutions. This system created more gaps and frustrations for students simply because colleges were not able to give clarity to them with regard to their application status, and were not cooperating in trying to close this gap because of their work load outside NSFAS issues.

The centralization of this model was continuously creating more problems for students. Inaccurate and inconsistent information provided by colleges and the NSFAS call-centre was also contributing to some of these challenges. Ever since the introduction of the student-centred model, more responsibilities had been taken from the college level to NSFAS, despite NSFAS being understaffed.

Regarding outstanding allowance payments to TVET students, he said no progress had been made by the colleges in trying to address the 2017 outstanding allowances. The disbursement of allowances for 2018 had started only now in other TVET colleges, and this had disadvantaged students from attending classes regularly. The Maluti, Goldfields, Majuba and Central Johannesburg TVET colleges were affected by this to such an extant that students in Majuba were arrested, the SRC in Goldfields had been intimidated by court orders, Maluti College property was burnt, and Central Johannesburg College was shut down today and exams had been disrupted. One had to ask what had led to the burning of property. College management had been adamant about engagements with the SRCs, and SAFETSA -- which was the umbrella body of TVET college SRCs across the country – had been denied an opportunity to intervene.

Mr Twani said there should be standardisation of student allowances, and the DHET should give convincing reasons as to why there was such a big difference in the allocation of student allowances between TVET colleges and universities. According to the DHET bursary rules and guidelines (page 19, paragraph 43), R22 019 was the maximum amount awarded per student for accommodation, inclusive of meals, compared to the university approach which gives a deserving student an allocation for accommodation, and an allocation for meals not inclusive of the accommodation amount, This painted a picture of universities as glorified institutions of learning that should be given priority in the higher education space.

SAFETSA’s recommendations were:

  • NSFAS should introduce a monitoring process to oversee the disbursement of allowances to students.
  • Colleges that were demanding registration fees from deserving students should be held accountable with consequences.
  • DHET should introduce a pre-registration process in TVET colleges, so that students were allowed to register a year prior the new academic term.
  • DHET must engage the Department of Basic Education (DBE) and universities on best practice with regard to the issues of pending results and certificates, as their current system was failing students and colleges.
  • NSFAS should be decentralized and be brought close to its clients, the students.
  • There should be data integration between NSFAS and colleges.
  • DHET should give colleges deadlines with regard to the 2017 outstanding allowance.
  • The Portfolio Committee on Higher Education should advise the DHET and intervene where possible with regard to the ongoing unrest at TVET colleges.
  • Allowances for accommodation and meals should be standardised across all institutions of higher learning.
  • It was important to have a stakeholder meeting with NSFAS, the DHET, college principals, the Technical Vocational Education and Training Colleges Governing Council (TVETCGC) and SAFETSA, in order to identify exactly where there were gaps, led by Portfolio Committee

Funding and payments update: NSFAS

Mr Siswe Nxasana, Chairperson of NSFAS, said that NSFAS had to review their operating model urgently to ensure that poor and working-class students had everything they needed to study. Stakeholders needed to work together to address these issues.

NSFAS had introduced a roll-out of the student-centred model in full last year, but things had not gone well. Although there were problems this year, NSFAS had made funding decisions in January, and with only a few weeks to put systems in place, it had made the first upfront payment by 25 January, which was good.

NSFAS had produced 329 844 loan agreement forms late into 2017. Of those, 300 000 had been signed and concluded, and the payments had been finalised. When NSFAS continued to work with institutions, particularly with TVET colleges, bursary agreements were not finalised. 29 273 of the loan agreements related to 2017 had not been finalised. Of the R13.9 billion that had been allocated to NSFAS, there was currently R440 million which was still unused in respect of those 29 000 students. NSFAS needed cooperation from the students and the institutions to address this issue. They were doing their best, and 2017 had largely been supported. There were amounts that were unused, but most issues had been resolved.

Looking at 2018, the policy announcement made in December 2017 had given NSFAS very little time. NSFAS had a system which was interdependent on other role players. It had mobilised many students from areas where there was no internet, to help them with applications. For first-time entrants, NSFAS had received 417 284 applications. Those applications were received at both universities and TVET colleges. There was involvement with young people, which was largely welcome. Out of the applications received, NSFAS had been able to make funding decisions earlier this year. It could communicate to young people that they had qualified for funding.

There had been a merging of policy which had made things easier. The next phase was to work with institutions, to make sure that students who qualified for funding were offered academic places and were registered at the institutions. There was a need to ensure that there was automation to improve the integration of data. NSFAS was working closely with the DHET to close this gap. Progress had been made with matching the data, but there were institutions which were delaying the submission of that data. Sorting out the integration was a big issue. Last year there had been no integration. NSFAS had had to recapture data, which was why there had been so many delays in completing funding decisions. Universities and TVET colleges use different systems, and NSFAS had to integrate with all the different systems. By the time NSFAS had reviewed the process, the system had become more integrated.

Until the change of data and information was concluded, NSFAS had made three tranches to both universities and TVET colleges amounting to R6.47 billion. He acknowledged that the system at universities and TVET colleges may not be ready to administer the allowances. The letter that had been put out in January 2018 was clear that the allowances and upfront payments were to be used in the balances meant for allowances. As far as NSFAS and the Department were concerned, there was no confusion that the upfront payments were meant for tuition. It was an issue which was causing confusion, however. At universities, NSFAS had made the first payment on 26 January 2018, the second payment on 20 March and the third payment on 2 April.

Holding institutions accountable was important, and it was also important that students helped in this process. Initially this was going be a NSFAS responsibility under the student-centred model, but help was needed from universities and TVET colleges. The result was that there would be a fourth tranche to the institutions. It was essential for NSFAS to get the details of who had been paid and who had not. Intermediaries would be added in certain cases in some institutions to assist with challenges and barriers. There were challenges in the NSFAS system, but collaboration with the Department and the universities had assisted NSFAS to deal with the administrative issues.

The major issue was the integration of systems within institutions. Part of the review of the student-centred model was about how quickly integration could occur. He agreed with the Minister, that if SASSA could disperse to 17 million people, so could NSFAS. NSFAS should therefore be able to integrate and have an automated process to handle applications. There was the sBux system, which could assist in this regard. Ultimately the process must be made easier for students. The issue of allowances was a particularly important one. NSFAS had issued a circular to show how these upfront payments worked.

NSFAS was ready to make the upfront payment of the fourth tranche. As far as the sBux was concerned, there were some issues but it continued to work, and NSFAS continued to make payments. Payments amounting to over R127 million had been made to over 30 000 students as part of the sBux system. When allowances were not disbursed, it was due to other factors within the institutions.

As far as the future of the student-centred model was concerned, the board had started a review process last year. Importantly, NSFAS continued to drive the issue. The board had created a committee to address this and make progress. The target was to resolve the integration issue with the institutions by the end of July. This should put NSFAS in a position to be prepared for applications for 2019. These issues could not be repeated.        

In Summary, NSFAS believed that the student-centred model should be retained. The system worked, even though it had problems. It was important that NSFAS worked with other stakeholders. Lastly, NSFAS needed to work on the automation process and look at the review to address the issue of allowances, amongst others.

Minister’s comments

Ms Naledi Pandor, Minister of Higher Education and Training, expressed concern at the delay in the allocation of funds to students and universities. There had been a lack of closure of 2017 which presented a serious systems’ limitation that needed to be addressed. She agreed with Professor Bawa that there could not be a repetition of this in 2019. There was a system problem and a capacity issue within NSFAS. There was a need to work closely with universities to address this challenge.

The interpretation of the student-centred model as being one that did not include support and collaboration with university financial aid programmes was a huge error. There had to be a return to a partnership that would ensure that universities would administer. Universities had not always been as responsible as they should have been. It seemed strange to her that universities do not know which students needed funding, for example. They could not give data when it was asked for, or were unable to encourage students to sign what students needed to sign.

There had been a hands-off approach by the institutions. It was possibly the result of dissatisfaction with the new model not assigning funds to financial aid offices. However, it had been found that the Department was not getting the help it needed. It had been found, for example, that there was raw data on students, which did not help. There had to be collaboration between the relevant role players. She gave assurances to the students that they were trying their best. The student financial aid schemes were being supportive. The chairperson of NSFAS had been going above and beyond his normal duties on this matter. The necessary steps had to be taken to ensure 2019 begins well.

It was no surprise that challenges existed, as the policy announcement had come late. Nevertheless, the key issue was that the government had introduced free education for working class families in order to advance South Africa. However, the system must be made to work. Student organisations needed to help with the communication campaign. It had been identified that there were students who did not complete what was required for funding to be released. Information was essential. This must be a collaborative effort so that the system worked in the interest of the students. Effective communication material must be developed. Most people knew very little about how the system worked and what was required. This was especially difficult for first year students. Information needed to be communicated in this regard through adverts and leaflets. If the government, through the social security agency was able to successfully issue R12 million in grants every month, 240 000 to 300 000 young people could be assisted.

Institutions that did not have information technology (IT) capacity would be helped to develop it, particularly TVET colleges, as they need specific support. When the student financial aid committee presented, they would give some sense of the modifications that they were thinking of and their identification of some of the institutional inadequacies that were needed to be addressed to have a fully integrated system that operated for the benefit of all young people and institutions. The DHET had attempted to intervene in this regard. She hoped the Portfolio Committee had seen the statement she had issued on the University of Zululand. Action had been taken in terms of the report. This would come back to the Committee, and would give an indication of what had emerged from the forensic information. 

She was aggrieved by the burning of property. Public money would be needed to restore property, and there was no justification for its destruction.


Ms J Kilian (ANC) said the input of the students was relevant, as it spoke to accountability alignment. Would the system in place ensure accountability up to the last recipient? There should be a record, and the Auditor General (AG) should be able to track money down. There had to be co-operation from the students. She wanted clarity on the capacity and processing capability of NSFAS’s ICT systems. She was concerned with the reconciliation process. Sometimes money was paid out to institutions and it did not go to the students. This was an imminent risk to the entire system, which could cause it to collapse. Which institutions had reported back and which had not? Institutions must account for money received, as it was from the public service. How many of the institutions had submitted the allocated allowances to students? One had to ensure that the right qualifying beneficiaries were supported, and timeously so. Institutions could not be allowed to utilise money meant for students to fund operational expenditure. There must be a clear understanding, and if regulations needed to be made, then this must be done. In terms of public finance management, money had to go to the right beneficiaries. There was a level of dissatisfaction and a lack of understanding, which must not be allowed. Was the system able to ensure accountability? Which of the institutions were sitting on money and not dispersing it to the students? Proper action needed to be taken. One could not just allow this to continue, and there must be consequences for institutions which lacked accountability. She wanted clarity on the system. Reports must be received from these institutions on a regular basis.

Dr B Bozzoli (DA) disagreed with Ms Killian, and said the real issue was that according to the Department’s presentation, NSFAS had not yet paid a single student. All the money that had been paid to students had been from the institutions, and this not what it was meant to be. It was meant to be the student-centred model. Ex-president Zuma and the party in power that supported him, had brought NSFAS to its knees. NSFAS had not been able to cope, and it had failed. By June, no student had received money from NSFAS.

She wanted clarity on the numbers from the NSFAS presentation. The NSFAS report on progress on processes leading to disbursements as at 28 May 2018 states that 211 704 university students and 147 139 TVET students had met funding criteria. However, it was not known how many of these students had been admitted to the institutions, so were the numbers related to bursary registrations (81 402) accurate or were there more to come? Was this still incomplete? Where it referred to contracts signed, it states that only 45 338 have been signed for universities and 15 348 for TVET colleges. The contracts had to be signed before one could access the money. Did this mean that only 45 338 had had their contracts signed? This was a complete failure, and the system was corrupt. Institutions could not possibly fix this now, because with the student-centred model they had had to reopen the financial aid offices and disburse money to students. This was outrageous.

She acknowledged that universities had financial aid offices but expressed doubt as to whether TVET colleges did. Did colleges have the ability to pay out the complex nuanced amounts required? It was no wonder that the payments were not happening. Many of these colleges did not have the cash flow. How many protests had there been at the colleges? She had read that 16 colleges had closed down as a result of protests. These protests had been as a result of a lack of NSFAS money. This was ending careers, as students had been kicked out of private residences. Sometimes people who ran the private residences had not been paid. What efforts were being made to assist students with particular hardships, such as a lack of accommodation or food? It was appalling to hear what students were going through, and it was not surprising that they did not attend classes. 

Mr C Kekana (ANC) endorsed what the Minister had said regarding burning buildings. No building should be burned, as the cost of rebuilding property came from taxpayers’ money. He expressed gratitude for the recommendations, as these should provide solutions. The student-centred model should be centralised, but this should not be limited to just offices, for example. There should be alternatives which helped the process. He wanted clarity on how money was allocated to institutions.

Mr R Mavunda (ANC) agreed that whenever there was a protest, facilities should not be burnt. All the presentations had put forward progressive recommendations, and the Committee must take responsibility to implement them. Communication needed to be improved. An example of this had been the letters. It was clear that there was no communication amongst stakeholders. Students were unaware of what was happening with NSFAS and the DHET. The centralisation of NSFAS had been indicated as a concern by the students. They had pointed out that there could not be one office for the entire country. Data was a problem. Students could maybe assist in this regard. Information was very important and everyone should have access to it.

Ms N Nolutshungu (EFF) said that the DHET and SACPO had answered a lot of the questions. SACPO had said that the loan order had been delayed by NSFAS. However, NSFAS had said that they could not pay if they did not have the names of students that had been paid. Something was wrong. She wanted clarity on this. It was June and there were students who had not received their allowances. This had to be addressed. There were students who had no money for food, but there was money in NSFAS. She asked for a breakdown of funding that was owed to each institution. She expressed concern that there was no monitoring system to indicate which students had been paid. There had been some good recommendations. She suggested that the relevant stakeholders get together and deliberate on the recommendations.

Mr M Wolmarans (ANC) referred to the letters, and said there was understanding that 20% could be used to help, and the 80% could be used for the same reason that the students were having issues with. These were operational issues. The institutions were under the impression that money could not be touched. This money, or at least a portion of it, was not being given to the students to alleviate any pressure. He wanted clarity on this. Regarding the NSFAS contracts, were the 12 558 outstanding supporting documents part and parcel of the students already in the system who could not access their allowances? He asked about the integration of systems that could be done by the end of July. Everyone had hailed the student-centred model when it was introduced. There was only one presenter who suggested abandoning the model. One needed to find where the loopholes were instead of creating a new model.

The Chairperson asked if the letters spoken about could be forwarded to the Committee. She said that everyone was in this together. A joint solution needed to be found. The proposals made were welcome. The Committee needed to work through them, and new proposals would be suggested. She asked the students to what extent at all the institutions resources were made available to deal with the kind of issues Members were asking about. At every institution, there was a student who was responsible for interfacing with relevant stakeholders. When there was a problem, the students did not seem to know where to go. Was there anything that helped them as students? Could the universities and colleges assist students in this regard? What was being made available to assist students when it came to interfacing? For both the colleges and the universities, each one had a different set of rules. How did this impact on the interface with NSFAS? There was a need to find out where the fault lines were. Were the different challenges inherent in all the systems? This would help to identify the problems which the Committee needed to take into consideration. The approach needs to be holistic. A proper investigation was needed.

When the Committee engaged with registrars’ offices, they were quite helpful. The registrars’ offices could tell it which systems worked. When it came to the colleges, things became quite difficult. She asked the DHET whether the Act could be changed. Did the law lend itself to these issues? There may be a need to change the law. If one looked at NSFAS as an entity, the board should maybe start separating the universities from the colleges.

She said there needed to be uniformity in the approach to universities and colleges. What made it impossible for things to be done? The Minister had a lot of power in terms of the law. She wanted to know which colleges and universities had not received their 2017 allocations. The first semester was about to close -- what did the situation look like? Were there disruptions, which showed that there was no teaching and learning going on? From what had been seen from the Committee’s oversight visits, things had improved from 2016 and 2017 in respect of the relationship between students and management. However, there were problems and isolated issues everywhere which presented a severe problem. When one talked about a student-centred model, what was required? NSFAS as an entity was responsible for many things. The R40 million corruption case had gone to court, which was a good thing. It showed that there was law in this country. Corruption needed to be punished at every level.        

Response by entities


Mr Thabo Mofokeng, Treasurer General: SAFETSA, said that SRCs around the country were very active in ensuring that they assisted students. The DHET had done workshops and training to make sure that SRCs were capable enough to resolve student’s issues around NSFAS. SAFETSA were concerned with the inconsistency of information which NSFAS provided to students and campuses. This needed to be strengthened. Sometimes one could have three different responses in one day, which made students frustrated. This must be resolved.

Stakeholder meetings had to be emphasised. SAFETSA usually met different stakeholders individually. When meetings occurred, stakeholders usually blamed one another. SAFETSA needed the Portfolio Committee to facilitate more meetings with all the relevant stakeholders present. Meetings where college principals were not present were becoming a challenge. Direct issues needed to be dealt with. There were colleges which were struggling with funds who needed to be benchmarked for further assistance. Information needed to be consistently provided.

Regarding the interpretation of policies of NSFAS, the fact that the letter sent to SACPO had been interpreted differently was a problem. This gap must be closed, as it delayed processes. He was sure that Mr Zungu was not the only person who had interpreted the letter for the allocation to be utilised for accommodation purposes.

Mr Thato Kgetse, Education and Transport, SAFETSA, said it was important that there must be a monitoring system established to ensure that disbursements and signing of contracts were dealt with. Reports were needed every quarter.


Professor Bawa said that it was in the interest of universities to keep money. They were public institutions and were subject to the same audit regulations as institutions like NSFAS were. The confusion over communication had been a case of a breakdown in systems. Universities did not just want to hold on to money -- the issue was more complex. Universities like Wits and UCT had the capacity to manage cash flow because they had the resources available. At poorer universities, this was more of a challenge.

Centralisation was important, and the student-centred model allows one to have offices around the country. Technology did not require everything to be decentralised, and allowed for a centralised model, which could be a good idea.

Regarding the question on allocations, he said that when he was the vice chancellor at Durban University of Technology in 2010, the university had done the allocation. This had changed. Now one had a centralised model, and a mismatch had resulted. NSFAS also had people at universities to help students. Technology was a small part of the integration process. Financial issues were a sector-wide project, not a NSFAS project. Each university had its own peculiarity. It was important to connect each university to the bursary programme. This required looking at the range of skills available at universities. It’s not just about communication between institutions, but also about communication between students and NSFAS. 

Ms Christelle Feyt, Senior Director: Student Access, Stellenbosch University, said that everyone had to collectively get their act together. One had to go back to the basics of a sound basic business model. Students sometimes did not have funding at the beginning of the year.


Mr Sanele Mlotshwa, Deputy President: SACPO, said that colleges had been able to cope with minimal resources so that students could do their online applications. Colleges were not well resourced. There must be a clearly defined role for each role player. NSFAS allegedly had the responsibility for the administration and disbursement of allowances. However, colleges did not have the capacity to do so. The basic guidelines needed revision. SACPO was fully committed to finding solutions.  


Mr Nxasana referred to the question of the accountability of institutions, and said that all stakeholders must work together to make sure the loops were closed. Information must be gathered accurately from intuitions and students by July, so the 2019 applications could begin. There were four components to the system. There was a system that processed applications, where there were issues but this had largely been resolved. The second part of the system was a banking system, where information was loaded. The challenge now was that previously NSFAS had had a loan system, but now two systems had to be run to assist both first time and returning students. All the first time and returning students were getting bursaries instead of loans. However, the loans had to be completed, and that was why the system remained. The system was never configured to deal with the new system in place. There was a lot of money to be processed. There were graduate students who were part of the system who were paying off loans, and were not part of the bursary system. There were issues regarding the integration of the database related to bursaries and loans. This was an IT problem, as the system was not configured to deal with these challenges.

Regarding the withholding payments, this was part of the fourth tranche. Payments would happen only once the institutions told NSFAS what they had done with the previous three tranches. Stakeholders needed to work together to address this. There were students who had been directly paid by NSFAS in the form of allowances. For example, NSFAS had paid 34 893 university students who were first entrants. Only a few institutions had applied for sBux. There were 16 237 students who were paid allowances in TVET colleges. In total, R115 million had been paid to students. It was not correct to say students had not been paid. Institutions were primarily responsible for disbursing, and they had been doing so.

With applications, once NSFAS received information from institutions then bursary agreements could be generated, and 95 000 first time entrants had bursary agreements. This was already above the number that had been estimated, which was 87 000. There was a difference between students who met the funding criteria and students who got academic places at TVET colleges and universities. This was a challenge.

Regarding the capacity to pay, last year NSFAS had made the same arrangement to work with student support services in the financial aid offices. This was not a 2018 issue. NSFAS had simply continued to work with this process, because the integration issue had taken longer. NSFAS appreciated that support. It had paid allowances in terms of the first three tranches to all TVET colleges and universities. All students and institutions had received money based on the estimated rollout of numbers with which NSFAS had worked with the Department and institutions.

The data issue was a big challenge. Data was received every day which assisted NSFAS to confirm who had been registered. Sometimes it sent teams to help institutions with integration issues. Universities and TVET colleges used around seven different systems. He assured Members that NSFAS was working very hard to ensure that this process ended by July, and the 2019 applications could begin. However, as Professor Bawa had said, there were broader challenges in the whole “ecosystem”. There were currently two systems. There was a system that managed enrolment and a system which managed what course or what faculty students were doing. It was not just one system.

The question about the list of students to be paid was an everyday issue and a work in progress. This was important to stop fraud, where students were receiving money when they should not.

Regarding the breakdown in terms of institutions, NSFAS had a full schedule that was made available by institutions, which presented information on which students needed assistance.

The fact that NSFAS had a new team was because of a decision that had indicated the organisation was not fit. NSFAS needed particular skills to manage its operations. The team that NSFAS had here was dealing with continuity issues, which were being managed. These issues would always present challenges. NSFAS could not come back to the Committee and speak about the same issues. In spite of all the challenges NSFAS had faced, he said that as chairperson he had far more confidence in the organisation. There was a committee now which oversaw certain processes.


Dr Parker said that the students’ issues need to be sorted out and the system must work. Last year, the Department had reviewed the Act. It did not need to be changed, but a mechanism had to be developed to help make new regulations and policies. This would be implemented next year. As the Department was dealing with the challenges of this year, there was a need to work together to mitigate any risks. The system had not fallen apart, but it did have individual problems.

Closing remarks

The Chairperson said that all the entities would be contacted individually on the issues discussed. She wanted to know which institutions had problems. She added that a national crisis no longer existed, and now individual issues had to be dealt with.

The meeting was adjourned.   


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