National Student Financial Aid Scheme Annual Report 2006/07
NCOP Education, Sciences and Creative Industries
19 September 2007
Meeting Summary
A summary of this committee meeting is not yet available.
Meeting report
EDUCATION
AND RECREATION SELECT COMMITTEE
19 September 2007
NATIONAL STUDENT FINANCIAL AID SCHEME ANNUAL REPORT 2006/07
Chairperson: Mr B J
Tolo (ANC, Mpumalanga)
Documents handed out:
National Student
Financial Aid Scheme (NSFAS) Annual Report 2006/2007 presentation
Audio recording of
meeting
SUMMARY
The Committee was briefed by the National Student Financial Aid Scheme on
its 2006/07 Annual Report. The briefing touched on its main focus and strategic
goals and provided the Committee with a figurative comparison of its activities
for 2006 and 2007. In as much as members were impressed with the work done by
NSFAS concerns were raised over a number of issues. Accessibility of NSFAS to
students in rural areas was a huge concern to members given that lack of
funding for tertiary education was a common problem in their constituencies.
The recurring problem of registration fees being payable upfront and financial
exclusions at tertiary institutions were also discussed. Members also showed a
keen interest on how the student loan process worked and highlighted
discrepancies in the process.
MINUTES
The National Student Financial Aid Scheme delegation comprised of Ms Merle
Festers: Acting Chief Operating Officer and Chief Financial Officer, Ms Linda
Nhlumayo: Chief Operations Officer, Mr Xolani Gobelo: Communications Officer
and Mr Julian Topkin: Information Technology Manager.
The Committee was given a brief background on NSFAS. Its strategic goal was to
provide access to higher education for financially needy South Africans who
were academically able in support of the country’s Human Resource Development
Strategy whilst at the same time making a contribution to the alleviation of
poverty. Ms Festers gave a with a breakdown of figures comparing 2006 with
2007. The comparison related to new grants that had been received, re-injected
funds, loans that had been awarded, administration expenses, bursary wards,
numbers of students that had been assisted, average award sizes, loans that had
been repaid and the number of courses that students had passed. On average
there had been increases across all the areas compared - besides the number of
courses that students had passed. The number of courses that students had
passed had decreased from 75.6% in 2006 to 73.8% in 2007.
Ms Festers explained the key parameters in order to qualify for assistance,
touching on the maximum and minimum award amounts as well as the interest rates
that were to be charged on loans. The annual awards had steadily increased
since 1991 and so had the loan recoveries in recent years. During the financial
year 2006/07 98% of NSFAS funds had been spent on direct awards to students and
just under 2% had been used to cover administrations costs. The Committee was
given a breakdown of bursaries available over the next three years. Ms Festers
mentioned that the Auditor-General had given NSFAS a clean bill of health. She
concluded that the way forward would be the continued focus of NSFAS on
reaching all prospective and deserving students.
Discussion
Ms F Mazibuko (ANC, Gauteng) was appreciative of the figures on the
numbers of students that had been assisted by NSFAS but said that detailed
figures of the numbers of students per institution would be even better. A
breakdown of such figures per institution would be informative on the issue of
financial exclusions. She also asked how NSFAS assisted students who did not
have the registration fees upfront that tertiary institutions required. Ms
Mazibuko additionally asked what other outreach programmes NSFAS had in place.
Ms Festers said that the figures would be forwarded to the Committee. She noted
that the issue of financial exclusions was not necessarily straightforward.
Each case needed to be considered on its own.
Ms Nhlumayo explained that tertiary institutions provide NSFAS with lists of
students who do not have the funds for registration. NSFAS would then make
funds available upfront for registrations.
Ms Festers noted that funding and outreach was a challenge. NSFAS however did
have an outreach programme in place. Schools were visited and pamphlets were
given out. Interaction with NGOs was also taking place. Mr Gobelo added that
NSFAS was engaged in mass marketing. Schools were provided with posters and
pamphlets. School libraries were also in the process of being supplied with literature
on the subject. Open days and exhibitions were held with talks even being given
at school farewells.
The Chair asked if students could be admitted to universities without
registration fees.
Ms Festers noted that NSFAS had an arrangement with tertiary institutions to
provide NSFAS with lists of qualifying students who require upfront payment of
registration fees.
The Chair asked who conducted the means test on students.
Ms Festers replied that the parameters for the means test were put together by
NSFAS. The actual testing was however conducted by the financial aid officers
at tertiary institutions.
Mr M Thetjeng (DA, Limpopo Province) asked whether the financial aid officers
at tertiary institutions were employed by the institutions or by NSFAS.
Ms Nhlumayo replied that financial aid officers were employees of the tertiary
institutions and not employed by NSFAS.
Ms N Madlala-Magubane (ANC, Gauteng) stated that NSFAS was not well known in
members’ constituencies.
Ms H Lamoela (DA, Western Cape) said that registration fees were especially a
problem for rural students. She was aware that NSFAS did assist in covering
registration fees partly but asked how it was done. She pointed out that the
presentation had been quiet on challenges faced by NSFAS.
Ms J Vilakazi (IFP, KZN) said that tertiary institutions require students
applying for financial assistance to bring in pay slips from their parents. She
felt that even if parents earned well it did not mean that they could afford to
send their kids to university, as they might have huge debts to service. She
asked why was it that NSFAS provided the funds but it was the tertiary
institutions that made the decisions on who received loans and bursaries.
Ms Nhlumayo replied that proof of income was needed as students compete for
financial assistance. Some form of financial proof was needed. If no pay slip
was available, an affidavit would suffice.
Ms Mazibuko said that she understood the difficulty in which NSFAS found
itself. NSFAS could simply not give all applicants financial assistance. Some
would be successful whereas others would not. She asked whether NSFAS had set
benchmarks for what was required of students by tertiary institutions. She
pointed out that the upfront payment of registration fees by NSFAS was not
happening at ground level even though it was an option available to qualifying
students. The bottom line was that the financial aid official at the
institution made the decision and in many instances the decision was not
questioned.
Ms Nhlumayo stated that NSFAS did in fact provide financial institutions with
guidelines. Tertiary institutions were also audited by NSFAS. The reality was
that many students often provided false financial information. A whistle
blowing programme had been initiated at the University of Witwatersrand to
stamp out the problem.
The National Credit Act required each financial aid officer to wear a name
badge when interviewing students. The official’s decision could be appealed by
a student.
Mr Thetjeng felt that the financial aid officials at tertiary institutions were
not very helpful to students. It was a requirement to first be registered as a
student before an application for a loan could be made. He felt the policy to
be exclusionary and unfair. He pointed out that the problem was at tertiary
institution level.
Ms Nhlumayo explained that there were temporary registrations at most
institutions. Once a loan was granted to a student, the registration would be
activated.
Ms Lamoela asked who monitored the situation at tertiary institutions at the
beginning of each year.
Ms Nhlumayo said that she had worked with financial aid officers at tertiary
institutions in her previous job and was aware of the members’ concerns. She
pointed out that each tertiary institution should have a financial aid
committee.
Mr Tolo asked if NSFAS made cash payments to students.
Ms Nhlumayo replied that cash payments to students were avoided as money was
often used to buy luxury items such as clothes and cellphones.
The Committee was concerned that students in rural areas were not aware of
NSFAS’s existence.
Mr Gobelo emphasized that NSFAS was heavily engaged in marketing itself
throughout various provinces and that many such projects were taking place.
Ms Nhlumayo noted that many students were aware of NSFAS but were not
interested in study loans. Bursaries were preferred.
Ms Masilo felt that NSFAS was mainly assisting students in the major cities.
Mr M Sulliman (ANC, NC) referred to recovered monies and asked what if all
attempts by NSFAS to recover loans failed. Were the property and homes of
defaulters attached?
Mr Thetjeng referred to figures of the total numbers of students assisted in
2006 and 2007 and asked what portion were new entrants to tertiary
institutions. He referred to the requirement that applicants had to be SA
citizens. His concern was that many false identity documents were in
circulation so what mechanisms did NSFAS have in place, to address this issue.
He asked what attempts had NSFAS made to sensitize loan recipients that, if
they pay back loans, it would in turn assist another deserving student. He
asked if it was perhaps possible to contact NSFAS directly for a loan, when a
principal at a high school had identified a certain pupil as an excellent
candidate for tertiary education.
Ms Festers replied that between 8000 and 9000 new students were assisted per
year. She referred to the sensitizing of loan recipients and said that NSFAS
intended to market this more aggressively.
Mr Topkin explained that NSFAS was systems intensive as opposed to labour
intensive. He referred to the issue of IDs and said that an algorithm obtained
from the Department of Home Affairs was used to check on the validity thereof.
The recipient of a loan needed to be a SA born citizen.
Ms Madlala-Magubane asked how loans were recovered from students who were
unemployed after completing their studies. She also asked why Mr Gobelo was
alone tasked with handling communications.
Ms Festers explained that loans were income contingent. Only when a student had
found work, would he or she be required to start paying back the loan. NSFAS
however did not blacklist students and in the event that it happened by
mistake, it would be rectified. She stated that NSFAS was in the process of
expanding its communication portfolio. Vacant posts were also in the process of
being filled.
Ms Mazibuko asked what the minimum income of parents must be in order to
qualify for financial assistance.
Ms Nhlumayo stated that the means test no longer sets a minimum income amount.
The test considered many factors such as income, expenses and tax. Financial
aid officers should use their professional judgement in making a decision
whilst at the same time being sensitive to the personal circumstances of the
applicant.
The Chair asked why the student was interviewed and not the parent. The concern
was that the student might not be fully aware of all the parents’
responsibilities and debts. He also asked how subjectivity in the interview
process was avoided.
Ms Nhlumayo responded that if the student felt that subjectivity was an issue
there was an appeals process. If the appeals process was unsuccessful,
inventions by NSFAS was an option.
The Chair felt that matters were being left to chance and asked if students
were even aware of the appeals process. He felt it to be a serious problem.
Mr Thetjeng agreed with the Chair. He stressed that the situation was bad at
ground level and that perhaps matters needed to be referred directly to NSFAS.
Ms Festers conceded that NSFAS did recognize its challenges.
Ms Vilakazi was concerned about students who had been blacklisted after
defaulting on loans.
Mr Tolo commented that legislation was in place to protect the unemployed from
being blacklisted.
Ms Festers said that the National Credit Act had required NSFAS to remove past
historical black-listings.
The Chair asked what happened to a loan recipient in the event that he or she
failed.
Ms Nhlumayo explained that if a recipient failed outright, financial assistance
was not continued for another year. She said that there was a sliding scale for
various degrees of failure. Past academic results were taken into account in
making the decision.
The Chair asked what happened when a loan recipient died. He also asked for the
percentage of what had been paid on principal loan amounts by students or what
percentage should be paid to NSFAS.
Ms Festers responded that with the approval of the board the debt would be
written off. Mr Topkin said that it was difficult to quantify what should be
received by NSFAS from students as students did not always keep in touch. NSFAS
was reliant on students to keep them informed of what their current
circumstances were. He noted that NSFAS did try to obtain figures on what was
considered realistic amounts that should be recovered. The bottom line was that
the loan was unsecured and that NSFAS was dependent on the student to make
repayments once employment was obtained. The requirement was also that
repayments were only required if earnings were above R30 000 per annum.
Ms Masilo asked how the reduction in the age of majority in terms of the
Children’s Act impacted upon NSFAS.
Ms Festers replied that the reduction in the age of majority from 21 to 18
years affected the rollout of electronic loan forms. Previously delays were
experienced as students had to obtain their parents signatures. The student no
longer needed the parents’ signature and signed the form himself.
Ms Lamoela stated that schools often buy supplies from agents. She suggested
that NSFAS brochures be left with the agents and when deliveries were made to
schools the brochures would go along. It would save NSFAS the cost of posting
or delivering them.
The Chair thanked the delegation for the presentation and stated that NSFAS
should feel free to contact the Committee if any assistance was needed.
The meeting was adjourned.
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