National Student Financial Aid Scheme Bill: discussion

Meeting report

EDUCATION PORTFOLIO COMMITTEE AND EDUCATION SELECT COMMITTEE: JOINT MEETING
27 October 1999
NATIONAL STUDENT FINANCIAL AID SCHEME BILL [B48-99]: INFORMAL CONSIDERATION

Documents handed out
ANC Education Study Group - Proposed Amendments to the National Student Financial Aid Scheme Bill (included in the discussion of relevant clauses.)

SUMMARY
The committees informally considered the National Student Financial Aid Scheme Bill [B48-99] in light of submissions to the committees on 26 October 1999. The committees went through the Bill clause by clause, presenting questions, concerns, proposals and party positions. Members of the Department of Education attended to answer questions and explain the Department's position on various issues.

MINUTES
Chairperson Professor S.M. Mayatula called the meeting to order and explained that the purpose of the meeting was to go through the Bill 48-99 informally, discussing all clauses, without making any decisions.

Professor Ripinga (ANC) made a formal proposal of a motion of desirability. This motion was seconded.

Mr. Seremane (DP) expressed a concern that the pacing for addressing recent legislation has been too fast to do the legislation justice. He and members of other opposition parties were particularly aggrieved about last minute changes to the schedule the previous week, which made it difficult for members to be fully prepared.

Chairperson Mayatula explained that the changes the previous week had been beyond anyone's control, and suggested that the committee move on to the agenda for this day.

The Chairperson welcomed and congratulated Mr. Thami Mseleku, the new Director General of the Department of Education. He then directed the committees to begin addressing each individual clause of the bill.

Long Title of Bill 48-99
Professor Ripinga introduced the ANC's proposed amendment, that the long title be changed by inserting in the last line of the title, after the word "loans" the words "the repeal of the Provisions Of Special Funds for Tertiary Education and Training Act 1993." There were no objections to this proposal.

A member noted that during the hearings the previous day, there had been a suggestion that the name of the scheme be changed from National Student Financial Aid Scheme (NSFAS) to Tertiary Education Fund of South Africa (TEFSA), because that organisation has been handling student loans. Advocate Boshoff, from the Department of Education, explained that, although TEFSA has been doing a good job, the purpose of this bill is to establish a national financial aid scheme, and that the name of the legislation should reflect its focus. Another member of the Department added that the name NSFAS is already well established with donor organisations, and that agreements have already been drawn up using the name NSFAS. Therefore, the name of the bill should remain the same.

Preamble of Bill 48-99
Professor Ripinga introduce the ANC's proposed amendment to the preamble to omit the preamble and insert the following: "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 sustainable." There were no objections to this proposal.

Clause 1 - Definitions
A member of an opposition party raised the issue of whether the bill should include a definition of the term "bursary," which is not currently defined in the bill. He noted that the bill does contain definitions of the words "loan" and "bursar." Advocate Boshoff responded that the meaning of the word "bursary" in this bill is the same as its common meaning as found in the dictionary, and therefore should not require definition. Chairperson Mayatula noted that this bill is a loan scheme, not a bursary scheme. The opposition party member responded that, in that case, there was even more reason to define "bursary."

Advocate Boshoff stated that the Department can certainly develop a definition of the term "bursary" in the context of a loan scheme. Director General Mseleku asked that the Department be given a chance to consider this issue more closely. There was general agreement to this request.

Clause 2 - Purpose of Act
No comments

Clause 3 - Establishment of National Student Financial Aid Scheme
No comments

Clause 4 - Functions of NSFAS
No comments

Clause 5 - Composition of Board
Professor Ripinga proposed the following amendments from the ANC:
1. On page 4 in line 36 to omit "eleven" to substitute with "thirteen"
2. On page 4 in line 41 after subparagraph (III) to insert a new subparagraph (IV)
"(IV) three members from the nominations made by national organisations representing students"
3. On page 6 in line 9 to omit "eleven"

There were no objections to this proposal.

Clause 6 - Terms of Office of Chairperson and Members
No comments

Clause 7 - Vacation of Office
Mr. Mpontshane (IFP) asked what would happen under this section if the students added to the Board according to the ANC's proposed amendments to Clause 5 left or finished school and were no longer students. Mr. Ripinga clarified that the amendment calls for members to be nominated by organisations representing students. It does not necessarily require that the nominated members actually be students. For instance, they could be consultants or advisors to the students. Chairperson Mayatula stated that students should be allowed to choose for themselves who should represent them.

Clause 8 - Filling of Vacancies
No comments

Clause 9 - Executive Officer and Employees of NSFAS
No comments

Clause 10 - Executive Committee
No comments

Clause 11 - Finance Committee
No comments

Clause 12 - Other Committees
No comments

Clause 13 - Meetings of Board and Committees
Professor Ripinga presented the ANC's proposed amendment: "On page 8 in line 46 to omit "elect a person" to substitute with "appoint a person for the purposes of that meeting."
There were no objections to this proposal.

Clause 14 - Funds of NSFAS
No comments

Clause 15 - Annual Audit
No comments

Clause 16 - Annual Report
No comments

Clause 17 - Remuneration and Allowances of members of Boards and Committees
No comments

Clause 18 - Application for Loan or Bursary
Mr. De Beer (UDM) asked whether the Department agreed with one of the submissions from the previous day, stating that there is a conflict between Clause 18 and Clause 19.

Advocate Boshoff stated that the Department's position is that there is no conflict, because the application for a loan or bursary is made to NSFAS, while the administration of the loan or bursary is processed by the higher education institutions. Director General Mseleku stated that the issue of applying for bursaries need to be looked at more carefully by the Department.

Clause 19 - Conditions of Loans and Bursaries
Advocate Gaum (NNP) noted that Clause 19 does not make any provision for the role of parents or guardians. Many students begin higher education while they are still minors.

Advocate Boshoff replied that this would not be a problem because the role of parents and guardians is recognized by the common law. Another member of the Department stated that it is important to note that loans under this scheme are not like normal bank loans for which parents or guardians might act as guarantors. Instead, students have to pay back the loans once they become employed.

Professor Ripinga stated that the ANC does not like the negative formulation of subsection (6) of this clause, and proposed the following on behalf of the ANC: "On page 12 in line 17 to omit subsection 6 and to substitute with the following '(6) The right to obtain a loan or bursary from the NSFAS cannot be construed from any provision of this Act.' "

There were no objections to this proposal.

Clause 20 - Designated Higher Education Institution
A member of the ANC asked whether it was correct that colleges are not included under this Act as institutions of higher education.

Director General Mseleku responded that a college can be considered as a designated higher education institution, if the institution goes through the process provided for the Act.

Another member asked whether Clause 20 is in conflict with Clause 18.

Director General Mseleku stated that, again, there is no conflict because applications are to be made to NSFAS, while institutions are responsible for administration.

Clause 21 - Repayment of Loans
No comments

Clause 22 - Obligations of Borrower
No comments

Clause 23 - Obligations of Employer
Advocate Gaum (NNP) asked whether the obligations of the employer required under this clause might cause some employers to be reluctant to hire borrowers.

Advocate Boshoff replied that under subsection (6) all administrative costs must be borne by the NSFAS. Therefore, there would be no negative financial implications for an employer.

Clause 24 - Obligations of South African Revenue Service
No comments

Clause 25 - Information to be Provided to NSFAS
Professor Ripinga proposed an amendment to this clause on behalf of the ANC:
On page 14 after line 52 to insert a new subsection
"(2) the NSFAS must on request provide such information as may be reasonably required by science, research and professional councils, higher education institutions and any other persons or bodies who grant loans or bursaries to students"

Advocate Gaum (NNP) asked whether Clause 25 takes into account the exclusions in the Open Democracy Bill and whether the Department considered the implications of the Open Democracy Bill for this clause.

Advocate Boshoff stated that the Department did consider such implications, and that in the opinion of the Department, the two bills support each other and are not in conflict. He noted that the key word in this clause is "reasonably."

Director General Mseleku added that the Open Democracy Bill will define what is "legal" and this, in turn will help define what is "reasonable."

Clause 26 - Delegation of Powers
No comments

Clause 27 - Regulations
No comments

Clause 28 - Repeal of Law
No comments

Clause 29 - Transitional Arrangements
Professor Ripinga presented the proposed amendment on behalf of the ANC:
On page 16 in line 27 after the word "between" to insert "TEFSA and"

There were no objections to this amendment.

Clause 30 - Short Title
No comments

Following the clause-by-clause discussion, Director General Mseleku stated that the Department would look at all the issues raised during this discussion and come back to the committees with a draft of its proposals. In the process, the Department would take into account the written proposals of each party.

Mr. van den Heever (ANC) commented that the ANC was the only party that had produced and given the Department written proposals at this meeting, and that therefore, any other proposals would have to be voted on at the committee meeting for formal consideration of the bill.

A somewhat heated discussion followed in which members of opposition parties expressed their opinions regarding appropriate procedure for submitting party positions to the Department and for the formal consideration of party proposals by the committee.

Advocate Gaum (NNP) expressed the opinion that if other parties have submissions and can get them in to the committee clerk in a reasonable amount of time, those submissions should be considered by the Department. Mr. Seremane (DP) also expressed concern that the Department be allowed to consider submissions from other parties. Mr. De Beer (UDM) felt the committee members should have the right to formally object to the ANC's proposals. Mr. Mpontshane (IFP) stated that the parties should have the right to have their proposals voted on at the formal discussion.

Chairperson Mayatula reiterated several times, his ruling that the opposition parties may put in writing and present to the Department only those issues which had been raised today at the informal consideration. New issues and/or proposals may not be presented to the Department.

The meeting was adjourned.