National Student Financial Aid Scheme Bill: voting

Basic Education

09 November 1999
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Meeting Summary

Documents handed out:
Proposed amendments based on submissions (Appendix 1)
Democratic Party proposed amendments (Appendix 2)

The National Student Financial Aid Scheme Bill [B48-99] was the subject of final approval. The Department submitted proposed amendments, which were based on the submissions discussed during previous meetings. These were formally accepted, and the Bill will be debated in Parliament on Monday 15 November. Minister Asmal was present at the meeting.


Meeting report

Most of the proposed amendments were agreed to without discussion. However clauses 1(iv)(vii), 5, 11, 18, 19 and 25 were discussed as the Democratic Party had drafted their own proposals for these clauses. The NNP submission had not been circulated so were done orally.

On clause 1(vii) of the DP proposed amendment, the Minister explained that there are other sources of money for skills training, both nationally and provincially, and so this suggestion goes against the main thrust of the Bill. Thus the DP proposal was voted against 2:16.

On clause 5(1)(a) of the DP proposed amendment, the ANC believes that this provision (ie. Representation on the Board), is really covered by the Minister's nominations, who should represent all stakeholders. The DP proposal was voted against 2:16.

Clause 25 proposal drafted by the DP was withdrawn.

On all other suggested amendments, the DP was voted against. On clause 19, it was felt that the conditions be set by the Board, as these might change from time to time, and should not be legislated.

Adv A Gaum (NNP) also made submissions, all of which were defeated.

The Bill, as amended, was agreed to, and will be Presented to parliament for debate on Monday, 15 November 1999. The researcher can be contacted on 403-8213 or 403-8118. The committee will discuss the Higher Education Bill tomorrow.

Appendix 1:
Amendments to the Bill (prepared by the Department on the basis of submissions)

[B 48-99]
1.On page 2, after line 11, to insert:

(iv) 'bursary' means that part of the loan granted to a person by the NSFAS which the person is not required to pay back on compliance with the criteria and conditions set in the written agreement; (ii)

1. On page 4, in line 36, to omit "eleven" and to substitute "13".

2. On page 4, in line 38, to omit "and".

3. On page 4, in line 40, after";" to add "and".

4. On page 4, after line 40, to add:

(iv) three members must be nominated by national organisations representing students;

5. On page 6, in line 9, to omit "eleven".

1. On page 8, in line 46, to omit "elect" and to substitute "appoint".

1. On page 12, from line 17, to omit subclause (6) and to substitute:

(6) A right to obtain a loan or bursary from the NSFAS cannot be construed from any provision of this Act.

1. On page 14, in line 49, after "25." to insert"(1)".

1. On page 14, after line 52, to add:

(2) The NSFAS must on request provide such information as may be reasonably required by the science, research and professional councils, higher education institutions and any other persons or bodies who grant loans or bursaries to students.

1. On page 16, in line 27, to omit "the executive officer and" and to substitute:
TEFSA and the executive officer of TEFSA and between TEFSA and

1. On page 2, to omit the preamble and to substitute:

WHEREAS it is desirable to -
redress past discrimination and ensure representivity and equal access;

respond to human resource development needs of the nation;

establish a national student financial aid scheme that is affordable and

1. On page 2, in the fifth line, after "loans;" to insert" to provide for the repeal of The Provision of Special Funds for Tertiary Education and Training Act, 1993;".

Appendix 2:
Democratic Party amendments to the National Student Financial Aid Scheme Bill


1 (iv) "bursary" means a non-repayable sum of money granted to a person by the NSFAS in order to enable the person to defray the costs connected with his or her education at a designated higher education institution, and those connected with the board and lodging of that person for purposes of attending the institution;

Justification: clarification of the distinction between "loan" and "bursary". "Loan" is defined in the act, while "bursary" is not.

(vii) "designated training institution" means a training institution as defined in the Manpower Training Act of 1981 with which the NSFAS has entered into an agreement in terms of section 20 (1).

All other references in the act to "higher education institutions" be amended to refer to "higher education or training institutions".

Justification: This act makes provision only for loans to individuals seeking qualifications higher than grade 12 or its equivalent. Other categories of post-secondary schooling, including apprenticeships, are a vital part of South Africa's efforts to build a skills base, and students in these fields struggle as much as potential higher education students to, obtain funding. We propose that, at the very least, training institutions offering apprenticeships should be included within the ambit of this act.

Composition of the board
5, (1) (a) (ii) two members must be nominated by national organisations representing organised business;
(iii) One member must be nominated by the Committee of University Principals established by section6 of the Universities Act, 1955;
(iv) One member must be nominated by the Committee of Technikon Principals established by section2 of the Technikons Act, 1993;
(v) One member must be nominated by national organisations representing colleges and recognised by the Minister for this purpose;

5. (1) (b) not more than [four] two members who may be co-opted by the board;
(2)(b) (v) has a knowledge and understanding of South Africa's skills shortage and of the requirements of the job market;

Justification: There is no direct provision in the act for either the higher education sector or the business sector to be represented on the board:
· The higher education sector is the foundation on which this act rests, and failure to provide for representation from it on the board is inexplicable.
· The objective of this Legislation is to give disadvantaged South Africans the skills that will allow them to participate meaningfully in the economy. Therefore the board must give some considieration to the demands of the job market, Thus representation from the business sector is of great importance. Our amendment to section 5(2)(v)(b) gives further emphasis to this point.

Finance committee
11. (1)(d) not more than five financial experts [who may] at least two of whom must be from the private sector (or members of the board).

Justification: The DP believes that state institutions must move away from management by bureaucrats. in this particular case, involvement of persons involved directly in investment management would greatly enhance the ability of the board to make maximum use of its resources.

Application for loan or bursary
18. Any student may, subject to the provisions of this act, apply in writing to (the NSFAS) any designated higher education or training institution for a loan or bursary on an application form determined by the board.

Justification: Clarification of the position regarding submission of application forms.

Conditions of loans and bursaries

(1) (a) Loans or bursaries granted by the board must be subject to the condition that the student -
(i) be a citizen of South Africa
(ii) be accepted as a registered student at a South African university or technikon, or be registered as an apprentice, at the time the award is made;
(iii) be judged to have the potential to succeed - not only
through performance in the school leaving exam;
(iv) be regarded as financially in need, as determined by a
means test; and
(v) be unable to finance his/her studies without an NSFAS award.

(b) Loans and bursaries may be subject to any (such) other reasonable conditions as it may determine, either generally or in respect of a particular loan or bursary, provided that steps are taken to ensure that all bursary applicants are informed of these conditions.

Justification: The act is vague on the question of criteria for evaluating applicants for loans. In order to ensure that all applicants have an equal and fair chance to obtain a bursary or loan from the NSFAS, criteria for acceptance must be specified as clearly as possible.

(3) Up to 40% of the loan awarded to a particular student may be
converted into a bursary,with the extent of this conversion to be determined by a student's academic results.

Justification: While policy for converting loans to bursaries have already been developed in practice, for the sake of clarity and in order to prevent abuse or perception of abuse, the broad outline of the policy must be laid out in

(3) A written agreement setting out the amount of the loan, interest payable, the terms and conditions on or subject to which the loan is granted, and such other provisions as may be agreed upon between the Board and the tertiary education or training institution in question must be entered into between the designated higher education or training institution acting on behalf of the NSFAS and every borrower or bursar, or the legal guardian of the borrower or bursar if he or she is under 18.

1. Greater clarity is needed on exactly what the contract should specify.
2. Clarification of the contractual relationship between the borrower and the
3. The act makes no provision for circumstances where the borrower is under 18. This could lead to the conclusion of contracts which are legally invalid.

Obligations of employer
(7) Where the borrower is self-employed or operates as an independent
contractor, he or she shall be directly responsible for making payments to the
NSFAS and shall be subject to the same obligations that apply to employers.

Justification: The act caters for loan retrieval only in cases where students are formally employed, but there are many other potential sources of income for loan recipients who have completed their studies, including contract, work and self-employment. The range of employment categories must be expanded to cover these eventualities.

Information to be supplied to NSFAS
25. (Every science, research and professional council),
every designated higher education and training institution (any other person or body who grants loans or bursaries to students must provide the NSFAS with such information as the NSFAS may reasonably require for the performance of its functions in terms of this act.

Justification: Institutions which have no formal relationship with the NSFAS, and especially those in the private sector, cannot be compelled to provide unspecified information to the NSFAS. Where such information is required, it should be obtained by the fostering of a co-operative and mutually beneficial relationship between organisations involved in this sector, not by compulsion.


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