Council for Higher Education; National Student Financial Aid Scheme Annual Reports 2006/07

Meeting report

EDUCATION PORTFOLIO COMMITTEE
2 November 2007
COUNCIL FOR HIGHER EDUCATION; NATIONAL STUDENT FINANCIAL AID SCHEME ANNUAL REPORTS 2006/07

Chairperson: Prof S Mayatula (ANC)

Documents handed out:
Council for Higher Education Presentation to the Education Portfolio Committee
Council for Higher Education Annual Report 2006/07
National Students Financial Aid Scheme Presentation to the Education Portfolio Committee

Audio recording of meeting

SUMMARY

The Council for Higher Education and the National Students Financial Aid Scheme briefed the Committee on their Annual Reports. The Council noted that in fulfilment of their mandate they had advised the Minister for Education upon request on National Policy Framework for Teacher Education and Development, and the Higher Education Qualifications Framework.

 

Through the Accreditation and Coordination programme a major breakthrough was made in developing cooperation with professional associations with the signing of a MOU with the Engineering Council of South Africa. Five institutional audits were conducted and five notification visits were made this past year. National Reviews were conducted by the Higher Education Quality Committee assessing 22 programmes including the B.Ed at ten higher education institutions. The Council had received a larger government grant and the Council’s dependence on donor funding had reduced. The Council had also enhanced its capacity to spend funds allocated to it.

 

The NSFAS noted that 91% of the students that benefit from the grants were black students. The demand for higher education had increased which meant the demand for funding also increased. The operation costs of the NFSAS were kept at a minimum, 1.75% of the total of the awards granted. The recovery of loans had shown a steady consistent rise registering R36m per month.

 

Some of the challenges faced and the areas in which NFSAS was focusing on to improve the scheme, included: compliance with the new National Credit Act, generating funding from South Africa’s private sector and other potential funders, improved communication with institutions, particularly with vice chancellors on the findings of the institutional audits, and the continued focus on reaching out to all prospective and deserving students.

 

Members were concerned about the effects of the National Credit Act on the scheme. The NSFAS was considering applying for exemptions from the Act as hindered it carrying out its mandate of advancing unsecured loans to students. These and others issues discussed in the meeting are outlined below.

 

MINUTES

Council for Higher Education (CHE) briefing

Dr Lis Lange, Acting Chief Executive Officer of the CHE; Executive Director, Higher Education Quality Committee (HEQC), noted the CHE’s four main responsibilities: advising the Minister of Education, monitoring the state of the higher education system and the achievement of policy objectives, assuring and promoting quality in higher education and contributing to the development of Higher Education (HE). She stated the Minister had addressed the Council on the priorities and concerns in HE and she had requested advice on the National Policy Framework for Teacher Education and Development, and the Higher Education Qualifications Framework. The Council had made comments on these documents in December 2006 and April 2007 respectively.

 

Dr Lange stated that the Council had proactively advised the Minister on areas such as: barriers in HE, the funding and financing of HE, macro implementation of institutional restructuring and its impact, outcomes and consequences, South African government involvement in and regulation of HE. The Council through its Monitoring and Evaluation (M&E) Directorate continued with production of institutional profiles. These profiles were analytical reports of the changes in the inputs and outputs of institutions in the core function of teaching, learning and research for a ten-year period. The M&E directorate had in the financial year finalised the publication of a research based review of topics ranging from access to HE institutions (HEIs), governance and regulations, institutions and culture, financial barriers and reflections on the changes in the HE. In addition it had finalised the research on the relationship between student success and institutional culture, a case study that was undertaken at the Universities of Pretoria, Western Cape and Witwatersrand.

 

Dr Lange stated that the Council under the Higher Education Qualifications Council conducted accreditation of programmes, institutional audits, quality promotion and capacity development and international relations. Through the Accreditation and Coordination programme a major breakthrough was made in developing cooperation with professional associations with the signing of a MOU with the Engineering Council of South Africa. Institutional audits were conducted in VUT, Wits, UFS, Da Vinci, Monash SA and Polytechnic of Namibia, notification visits were made to TUT, UP, DUT, UWC and IIE. Five reports were produced from the audits.

 

Dr Lange stated that the HEQC conducts quality promotion and capacity development through: the training of evaluators for programme accreditation and national reviews, training auditors and audit chairs, holding quality awareness forums, the student quality literacy project where they advise prospective and current students on the quality of programmes they should be enrolled in, and supporting the development of internal quality systems at HEIs.

 

Dr Lange noted that National Reviews were conducted by the HEQC. These included the assessment of the ACE, PGCE and the B.Ed at 10 higher education institutions (22 programmes in total). The reviews were carried out in the following fields, in the MEd, management and leadership, in B.Ed foundation and intermediate, ACE, mathematics and in the PGCE, FET colleges. The outcome was that some programmes received full accreditation, others accreditation with conditions, others received notice of withdrawal and some were not accredited at all.

 

Dr Lange stated that there were vacancies that had not been filled in the Council; the Council was in search of a CEO. She said that there was equal represention of all races in the Council and the gender profile of the Council was great as majority of its staff were women. She concluded by stating that the Council had received a larger government grant and the Council’s dependence on donor funding had reduced. The Council had also enhanced its capacity to spend funds allocated to it.

 

Discussion

Mr R Van den Heever (ANC) asked whether there was an audit report of the Council

 

Dr Lange confirmed that the Annual Report for the year 2006/07 had been submitted to Parliament before hand which was inclusive of an audit report.

 

Mr R Ntuli (ANC) noted that there was no commitment towards high schools. He stated that some of the matric students would repeat some classes more than once and would enrol into the higher education institutes with sloppy marks. He asked whether there was anything done to ensure that these students graduate.

 

Dr Lange noted that this was a very complicated issue. The Council could not guarantee that every student that enrols in the HE institutions graduates. However the HE institutions were doing there best to ensure that students get quality education. Similarly other institutions were engaged in the development of students in ways such as funding to ensure that the conditions of learning were favourable.

Ms P Mashangoane (ANC) asked whether there was a follow-up on the institutions whose programmes were accredited with conditions to see whether they had met the conditions and hence given full accreditation.

 

Mr Theo Bhengu (Acting Deputy Executive Director, CHE) noted that the institutions whose programmes were accreditation were aware of the implications of non-adherence to those conditions and therefore took them seriously. All the MBA programmes had been fully accredited and the MEd institutions had met the conditions imposed on them and had received accreditation.

 

Ms Mashangoane asked why the University of Limpopo was not one of the institutions audited.

 

Dr Lange noted that the audit cycle started in 2004 and that each year the Council audited 5 universities. The University of Limpopo was to be audited in the year 2010. The University of Limpopo Vice-chancellor had been invited to a forum were some of the issues that are required to be met under the audits were raised.

 

Ms Mashangoane asked whether the Council hired people living with disabilities.

 

Dr Lange noted that to her knowledge the Council had not received applications from people with disabilities. However the Council had an equity policy which recognises everyone to be eligible for employment if they are qualified for the job.

 

Ms M Matsomela (ANC) asked whether the Council had mechanisms to ensure that the recommendations made in the institutional audits were met and whether they were enforceable.

 

Dr Lange stated that the audit reports did not have any consequences. The Council presented them in the form of dialogue where the institutions would be advised on how to develop and improve their programmes.

 

Ms Matsomela noted that the Council was silent on how they help prospective students through the Student quality literacy project.

 

Mr Bhengu stated that the HEQC runs supplements in the newspapers, for example, the teacher paper in the Mail & Guardian, in the local radio stations where broadcasting is done through indigenous languages. Through these supplements they advice potential students on the qualities they should look for in the programmes they wish to enrol in and the rights they have.

 

Ms Matsomela asked whether there is a guarantee that the curriculum used in one university for example the Northwest University is the same as the one used in another university to ensure that all students across the country get a fair deal.

 

Dr Lange noted that the curriculum used in different institutions had to be different to allow the institutions to have autonomy on the programmes to undertake. What the Council emphasised was that the quality of the programmes conducted met the standards required by the HEQC.

 

Ms Matsomela noted that there was a shortage of maths and science teachers in the country. She wondered why the Council when carrying out accreditation concentrated only on ACE with respect to maths and science.

 

Mr Bhengu reaffirmed that there was shortage of maths and science teachers. However there were considerably more programmes that required the attention of the Council, for example, the capacity of institutions to deal with national reviews, management and leadership proliferation.

 

Mr B Mthembu (ANC) noted that most institutions that had received conditional accreditation were institutions situated in the rural areas where there were no resources to come up with quality programmes. He asked if the HEQC took into consideration the limitations brought about by the regional placement of the institution.

 

Mr Bhengu noted that the Council would not compromise the quality requirement as it was there to protect and ensure that students receive quality education. However the Council looked at some conditions in areas, for instance, where there was a crisis such as the limited number of teachers as a result of the lack of institutions to train teachers.

 

Mr Mthembu asked what role the HEQC played under the quality and capacity development project to ensure that institutions give quality education.

 

Mr Bhengu stated that the HEQC seeks to ensure the harmonisation of programmes in various institutions to ensure quality programmes. He stated that the South African-Finland Cooperation project was one such project where Finnish institutions were helping South Africa institutions to come up with internal quality assurance systems for their programmes. However some institutions faced problems with respect to harmonisation of their programmes.

 

Mr Mthembu noted that the Committee was to be briefed on the issue of institutional autonomy by the Council.

 

Dr Lange stated that an update on the report on investigations of institutional autonomy had been done. She stated that the understanding of the government’s conceptualisation of this issue took long. In addition the Council had to carry out a study with respect to the involvement of government through funding, planning and quality assurance to identify whether this was regarded as infringing institutional autonomy.

 

Mr B Mosala (ANC) asked what role the Council played with respect to the transformation of institutions.

 

Dr Lange noted that the South African interpretation of transformation gave rise to different interpretations. She identified that transformation does not only involve change with regard to equity but can be interpreted also to mean changing the ways of teaching, changing the institutional culture and challenge the place an institution holds among the HE institutions. However universities cannot operate without regard to the environments they are in and therefore transformation might be influenced by various issues.

 

Mr Mosala asked the Council what issues vice-chancellors raised when they attended forums.

 

Dr Lange noted that apart from the fact that vice-chancellors wanted more money to fund their institutions she could not identify specific issues raised.

 

Mr Mosala wanted the Council to comment on the issue of selection criteria used in different institutions. He asked whether they were similar or different and what the Council’s view on that was.

 

Dr Lange noted that the selection criteria used in the various institutions were different and that it would be wrong to require that they be similar. The bottom line applied is that one had to have passed a matriculation exam, upon which other criteria would be considered. She stated that if different institutions did not have different criteria it would create problems. For example some institutions consider equity and access of student to institutional learning. These students were placed under the special admissions categories. These and other criteria ensured proper enrolment of students.

 

National Student Financial Aid Scheme briefing

Mr Sipho M Pityana (Chairperson NSFAS) briefed the Committee on the Annual Report 2006/07. He stated that the strategic goals of the NSFAS were to provide access to higher education for financially needy South Africans who are academically able, in support of the country’s Human Resource Development strategy, while making a contribution to the alleviation of poverty, raise sufficient funding to enable NFSAS to realise its strategic goals and objectives.

 

He gave a breakdown of the number of awards granted in the financial year. He stated that 91% of the students that benefited from the grants were black students. The demand for higher education had increased which meant the demand for funding also increased. He stated that the operation costs of the NFSAS were kept at a minimum, 1.75% of the total of the awards granted.

 

In this financial year the award size stood at approximately R11, 083. He noted that 73% of the courses that students were funded for were passed, however this did not mean that the students completed their overall studies. Mr Pityana stated that NSFAS was expanding over the next three years the fund to benefit Funza Lushaka (teachers’ institutions), FET colleges and social workers. R120m would be made available to Funza Lushaka, R100m to FET colleges and R50m to social workers.

 

He had confidence in the way the scheme was running expect some teething problems that were being experience with regard the Funza Lushaka. The R100m made available to the FET colleges would be distributed among the 50 public FET colleges located in the 9 provinces. At present R66million had been paid to FET colleges and the rest would be paid by the end of the year. The expanded scheme was to target new programmes in fields such as civil engineering and building construction, electrical infrastructure construction, and engineering, among other programmes which fields were regarded as scarce skills.

 

Mr Pityana confirmed that the maximum award granted to a deserving student was R35 000 and the minimum award was R2 000 at an interest rate of 7%, a rate that was 6 basis points below the prime rate. The recovery of loans had shown a steady consistent rise registering R36m per month. NFSAS had received a substantial amount of money from recoveries which was re-injected into the scheme. In 2007 they received R341 million from recoveries.

 

Mr Pityana stated that the funds were allocated to institutions who would administer the funds through financial aid bureaus. The allocation formula was informed by the number of students and the cost of the studies at the respective institutions. He outlined how the financial aid offices operate: the offices invite students to apply, NSFAS carries out a means test and assesses the academic potential of the applicants, the size of the award is determined depending on the need of the student. The financial offices then ensure that loan agreement forms are completed correctly by the recipient and send the batches of forms with interim reports to NFSAS claiming money for the student. NFSAS processes the claim and makes payment which is credited into the student’s account. Mr Pityana noted that financial aid bureaus were an important component of NSFAS. NFSAS had structured programmes to do audits to see how the offices work. The scheme had introduced an award scheme to encourage quality assurance in the financial aid offices.

 

Mr Pityana concluded his presentation by noting the challenges it faced and the areas that NFSAS was focusing on to improve the scheme. Some of these issues include: compliance with the new National Credit Act, generating funding from South Africa’s private sector and other potential funders, improved communication with institutions, particularly with vice-chancellors about to the findings of the institutional audits, and the continued focus on reaching out to all prospective and deserving students. He stated that there was a category of deserving students who were left out since they did not meet the criteria required by NSFAS. These were students whose parents fell in the middle class but still could not afford the fees charged in higher learning institutions. Additionally their parents would normally not be creditworthy and therefore would not receive loans from banks. NFSAS was trying to play a mediatory role to assist these students get loans from banks at a good rate. NSFAS was looking into developing a fund to help underwrite the loans acquired by students.

 

Discussion

Mr G Boinamo asked how the scheme dealt with the issue of students being required to pay registration fees before being registered onto a programme as one of the conditions of funding was that a student had to be a registered student.

 

The Chairperson stated that the system had changed since 1995, students who were eligible for NFSAS funding were allowed to register into a programme without the payment of registration fees.

 

Mr Van den Heever stated that NFSAS audit reports in terms of management of NFSAS funds were commendable. According to audits reports, there had been a significant improvement in the compliance of institutions to NSFAS requirements. The consistent recovery of loans showed the dedication of the scheme.

 

Mr Ntuli asked if NSFAS created awareness of its services by visiting high schools in the rural areas.

 

Mr Pityana noted that this was a major challenge. He stated that efforts were being put to advocate to students in high school of the services that NSFAS rendered. He noted that NSFAS had partnerships with local-based NGOs who were funded to create awareness and assist students with simple things like filling out the application forms. He stated that there was a need to invest more on creating awareness.

 

Ms Mashangoane noted that the National Credit Act had adverse implications on the acquiring of loans by students whose parents’ creditworthiness was questionable. With reference to the agreements between NSFAS and the banks on behalf of the students she asked who would be held responsible for meeting the conditions of the loans taking into consideration the NCA.

 

Ms Linda Nhlumayo (Chief Operations Officer, NSFAS) noted that once NSFAS intervened the agreements would be between the banks, NSFAS and the students. Therefore the NCA would not affect the student as the relationship did not include the parent of the student. Students would be required to sign pre-agreement loan forms.

 

Ms Mashongoane noted that R60m had been paid to FET colleges; she asked whether NFSAS had any monitoring mechanisms to ensure that the money had been spent properly.

 

Ms Linda stated that NSFAS made sure the moneys advance to FET colleges was paid into the students account. NSFAS had close relationships with the various departments of education in the various provinces to ensure the smooth running of the FET colleges funding scheme. She gave the example of the department of education in Pretoria which was helping NSFAS by reaching out to the Colleges to ensure that they apply for their outstanding grants.

 

Ms Matsomela asked what improvement had been made as a result of institutions accommodating students eligible for NSFAS loans before registration.

 

Mr Pityana noted that the number of students enrolling to higher learning institutions had increased. He stated that this increased the demand for more funding thus the need to negotiate with the private sector to contribute to the scheme.

 

The Chairperson requested the presenter to give the literal meaning of the means test.

 

Ms Linda noted that the ‘means test’ looked at the family income, the number of dependents in the family, student fees, whether the student had other bursaries and the number of people in the household. The aim of the means test was to ensure that only the most deserving students would receive the fund to avoid a more deserving student from missing out on funding given the scarcity of financial resources.

 

The Chairperson argued that there was a category of student who did not essentially benefit from the NSFAS funds. This category included students who had not been fully funded, after passing all their exams would not graduate because the owed the institution outstanding fees. These students would not get jobs because they lacked documentation and as a result of which they would not be in a position to pay back their loans and would incur high interest on their loans. He asked what the Scheme was doing about such students.

 

Ms Linda noted that NSFAS funded 80% of the fees of a deserving student and the student would be required to pay the rest of the fees which would be 20%. She said that there was need to make a decision on how to assist these students. She noted that conversations held with Vice-chancellors did not allude to this issue the only issue that was discussed it that the institution was to allow the students to complete their studies irrespective of the outstanding balance. She stated that NSFAS would consider ways of handling this issue in the future.

 

The Chairperson asked whether the funding of social workers was a new scheme developed by NSFAS.

 

Ms Merle Festers (Chief Financial Officer, NSFAS) stated that the social workers funding was a new scheme.

 

Mr Mosala asked whether the conversations with the banks had yielded any hope for the sake of students.

 

Mr Pityana noted that negotiations with banks on the issue of advancing loans at low interest rates to students were not easy. He stated that NSFAS was counting on National Treasury to seek exemptions for students from the banks.

 

Mr Ntuli noted that some of the clauses were working against the people of South Africa, especially with reference to social development. He asked the presenter to highlight some of the provisions in the Act that were adverse to NSFAS noting that amendment of an Act was not as difficult as amendment of the Constitution.

 

Ms Festers avowed that under the National Credit Act, NSFAS was labelled as a reckless lender as they did not require any security for loans. On the other hand NSFAS was identified as a social developer lender. She stated that NSFAS would apply for exemptions against the stringent requirements under the Act to ensure that they would administer loans to students in need of these funds.

 

Mr Pityana noted that the National Credit Act did not have institutions like NSFAS in mind. He stated that if the application of exemptions as alluded to earlier would be granted NSFAS would be happy.

 

The meeting was adjourned.