National Student Financial Aid Scheme: briefing

Meeting report

EDUCATION PORTFOLIO COMMITTEE
27 February 2001
NATIONAL STUDENT FINANCIAL AID SCHEME: BRIEFING

Chairperson: Professor S M Mayatula

Documents handed out:
NSFAS Requirements for 2001

SUMMARY
The Chairperson of the National Student Financial Aid Scheme briefed the Committee on the management of the scheme, its funding, the number of students aided and the technology used. They have helped close to 81 000 students in the current year, out of more than 400 000 students enrolled at South Africa's tertiary institutions.

The Scheme itself was highly praised by the Committee, although they expressed the view that it needs to market itself more vigorously in rural areas that are far from tertiary educational institutions.

MINUTES
Ms Sithanga, Chairperson of the National Student Financial Aid Scheme (NSFAS), noted that NSFAS seeks to impact on all South Africans by providing students with financial aid. It aims to make a substantial contribution to students' financial aid.

On NSFAS's management process, she drew attention to their technology-driven process of awarding financial aid to students as being a cost-effective procedure. The administrative cost of the scheme was only 1 percent. As the scheme was mainly electronically driven rather than labour intensive this allowed for as much objectivity as possible in the allocation of loans to needy students. She noted that NSFAS allocates funds to tertiary institutions rather than to individual students and it is currently funding 36 tertiary institutions and four non-governmental organisations.

She said NSFAS targets financially needy students, requesting institutions to complete forms showing the demographic composition of their students. It has introduced a weighting formula for financially disadvantaged non-white students to determine what amounts will be allocated to which educational institutions. This removes the possibility that needy students in historically white institutions might not be covered by NSFAS.

The institutions bear the responsibility of informing grant recipients of their awards. A student must complete a claim form before the institution can claim the amount from NSFAS. To be eligible for a NSFAS award, an applicant must:
· be a citizen of South Africa (a permanent resident who is not South African does not qualify);
· be accepted as a registered student at a university or technikon in South Africa at the time the award is made;
· be studying for a first tertiary education qualification;
· be studying for a second tertiary education qualification as long as it is required to enable the student to practice in a chosen profession;
· be regarded as financially needy. In this regard, students are assessed in terms of financial neediness. This is done on the basis of household income and the student's potential to succeed academically.

Ms Sithanga said there is a built-in clause that allows student to be funded for more than the minimum period of study. This is to caters to students who were "underprepared" when beginning their studies and who may have to do an extra year in order to successfully complete their degree requirements. The institutions determine the minimum size of a student award and NSFAS sets the maximum amount of an award.

The funds allocated to a student are for tuition, accommodation and books. The award can also be used for boarding when there is no residence. In determining the maximum award to be allocated, the Board has to strike a balance between the information provided by the institution and the continued self-sustainability of the scheme. The NSFAS Chairperson acknowledged there is always more need than the Scheme can support. Students with good academic results are able to convert 40 percent of their loan into a bursary ie that does not have to be paid back.

Mr Roy Jackson, also from NSFAS, pointed out that the Scheme had improved its recovery rate. He noted that the bulk of its funds come from the state.

Ms Sithanga commented that various institutions have injected their own funds into the Scheme. This showed the degree of confidence these institutions have for NSFAS' grant administration. Mr Jackson added it is worth noting that there have been no private sector funds.

The criteria for the allocation of grants to students is based, not on race but rather on the financial need of students. He also commended the technology used by the Scheme which allows recipients to repay the loan to NSFAS directly through their banks. Again, NSFAS's administration costs are kept to a minimum. The use of the Internet has been a groundbreaking innovation because current and former grant recipients are able to review their loan status directly on the Internet.

Discussion
An opposition member said he was thrilled with the success of the scheme. He asked if it was possible for NSFAS to allocate money to people who have just completed matric but have yet not registered with any institution.

Mrs Sithanga said they could not fund students who had just completed matric and yet had still to register with a tertiary institution, she added by saying this was an impossible task to achieve.

Ms P Mathoagae (ANC) noted the difference in the allocation of resources to the different institutions and asked how feasible is NSFAS' Internet innovation in reaching all students at all the tertiary institutions. Secondly, she asked if students at tertiary institutions such as colleges were aided by the scheme.

Mrs Sithanga said legislation on this scheme initially targeted universities and technikons and excluded technical college and education colleges because they fell under the administration of the provinces. However this will change because the government through the NSFAS will allocate R20 million to colleges.

Mr S Ntuli (ANC) asked how tertiary institutions attract or recruit students.

Ms Sithanga said there are no institutions that deliberately chase students away. On the contrary, there is a drive by almost all institutions to get student registered in their institutions.

An ANC Member asked what caused 19% of students to drop out of tertiary institutions and how do these students repay their debts to NSFAS.

Ms Sithanga said quite a number of students are "under-prepared" when they begin their tertiary studies as a result of coming from understaffed schools with few resources. She noted, however, that these students have the potential to succeed at tertiary education level. NSFAS cannot prevent a student from dropping out although it can encourage and provide a supportive environment. Ms Sithanga added she was not qualified to answer questions that refer to the institutions themselves, such as the drop-out rate and recruitment of students.

An opposition member asked whether there were any concerns that the institutions might mismanage the funds intended for students, considering that students do not get the funds directly from the NSFAS. He also asked whether the block allocation of funds to an institution was based only on demographic composition.

Ms Sithanga said they have their own auditors that deal with the funds allocated to institutions and hence there is no possibility of mismanagement of funds. Furthermore each student signs a contract and these contracts are entered into the electronic system of NSFAS.

An ANC Member raised a concern about the amount of publicity done by NSFAS in rural areas, asking if it was sufficient to inform people in rural areas of opportunities for education. He also asked whether it was possible for students who were admitted to some of these institutions but not yet registered, to be awarded grants so as to enable them to pay their registration fees. He also asked why only 40 percent of the grant is converted into a bursary instead of 60 percent.

Ms Sithanga said the scheme converted 40 percent of the grant because it wanted to sustain itself financially if it were to convert 60 percent then it would not be able to do so. She also said she has noted the feeling of the meeting that more vigorous marketing should be embarked on by the NSFAS. They will also encourage school liaison offices at tertiary institutions to distribute pamphlets to high schools.

An opposition Member asked how the legitimacy of an application can be checked.

Ms Sithanga answered that, unfortunately, there is little they can do other than to scrutinise all information carefully. She asked the Committee again to distinguish between her organisation and the management of the various tertiary institutions in the country. She reminded the Committee that NSFAS cannot determine the policies of the various institutions.

Ms Gandhi (ANC) asked what percentage of students in the whole country are funded by the scheme. Second, she asked if students are refunded their registration fees by the tertiary institutions after NSFAS pays their fees.

Mr Jackson said they estimate they have helped close to 81 000 students in the current year, out of more than 400 000 students enrolled at South Africa's tertiary institutions. Ms Sithanga explained that a registration fee is normally lower than the up-front grant payment which generally includes a first installment for food, accommodation and tuition.

Mr Maphoto (ANC) asked about prospective students who come from other provinces, such as students from Gauteng studying in Cape Town, and find they have no place to stay. Is their accommodation paid for by NSFAS while they are searching for a place on campuses?

Ms Sithanga repeated that this is a question of policy for each educational institution and not one that pertains to NSFAS.