National Student Financial Aid Scheme (NSFAS) funding for registration fees for Higher Education Institutions

Committee: Basic Education

Chairperson: Prof S Mayatula (ANC)

Date of Meeting: 09 Feb 2009

Summary

The Chief Executive Officer of the National Student Financial Aid Scheme briefed the Committee on the role played by NSFAS to ensure that students who qualified for NSFAS assistance were not turned away from Higher Education Institutions because of an inability to afford the registration fees.  Initiatives included an offer to universities to make funding available up front to cover the cost of registration of NSFAS-assisted students, increased liaison with the Financial Aid Offices at universities, the presence of NSFAS on campuses during the registration period, the development of a communication plan to reach potential students at schools and the development of an electronic agreement form system to process and administer applications for NSFAS funding.

Members asked questions about the assistance provided to students with outstanding fee accounts at universities and who were unable to obtain their results or were prevented from re-registering the following year, the assistance provided to students who can not afford to complete only one or two modules, the qualification criteria for NSFAS funding, the percentage of qualifying students not assisted by NSFAS, the model applied in the NSFAS financial means test, queries referred to NSFAS and the Department of Education from constituency offices, communication between NSFAS and students and assistance provided to students to source alternative sources of funding.


Minutes

Briefing by the National Student Financial Aid Scheme (NSFAS)
Mr D Hindle (Director-General, Department of Education) introduced the Chief Executive Officer of NSFAS, Mr P Naicker, to the Committee.  The delegation from NSFAS included Ms L Nhlumayo (Chief Operations Officer) and Ms B Felman (Communications and Development Officer).

Mr Naicker presented the response from NSFAS to a specific question from the Committee, namely “What processes has NSFAS put in place to prevent new and returning students from being turned away from Higher Education Institutions because of an inability to fund the registration fees themselves” (see attached document).

In December 2008, NSFAS wrote to all the Vice Chancellors and Heads of Financial Aid Offices at the universities and offered to make upfront payments to the institutions to facilitate the registration of students eligible for NSFAS funding.  30% of the allocation to the institution became immediately available to the universities that took up the offer.  NSFAS required details of the students concerned.  To date, three institutions had taken up the offer for the 2009 academic year, to the value of R62 million.  Mr Naicker reported on positive feedback received from the University of Zululand and the Nelson Mandela Metropolitan University in particular.

Ms Nhlumayo briefed the Committee on the liaison between NSFAS and the Higher Education Institutions.  In addition to personal visits, NSFAS arranged training workshops at the universities, encouraged university officials to visit NSFAS offices and met with the student representative councils at the institutions concerned.  A taskforce was dispatched to the Vaal University of Technology to assist the institution after the death of the Financial Aid Officer and NSFAS was instrumental in resolving misunderstandings related to admissions at the Cape Peninsula University of Technology.  During 2009, NSFAS planned to conduct workshops on NSFAS services with all personnel in the Financial Aid Offices at universities.

A review of NSFAS activities conducted during 2008 revealed that many students only became aware of NSFAS when registering at universities.  Areas identified for improvement included the need to communicate with students at school level, to provide career guidance (especially in rural areas) to scholars, to provide information on the funding available for tertiary studies in general and scarce skills training in particular and the presence of NSFAS on campuses during registration periods.  During the 2009 registration period, NSFAS ran a pilot exercise at several universities and planned to incorporate the experience gained in future training programs.  NSFAS worked closely with the Financial Aid Offices at universities in implementing new initiatives.  A communication plan to reach students in schools was being developed and NSFAS undertook to brief the Committee on the implementation of the plan at a future date.

The issue of the late receipt of funds from NSFAS was an area of concern.  Mr Naicker reported that 20 out of the 23 Higher Education Institutions had met their allocation targets during 2008 and the submission of claims from the universities had improved.  The review indicated that the manual processing of 155000 agreement forms submitted by students placed a substantial administrative burden on the Financial Aid Offices at universities.  The forms must be accurate and complete and any errors or omissions resulted in lengthy delays in the transfer of funds from NSFAS to the students’ fee accounts.  An electronic loan agreement form system was developed and tested at two universities.  The pilot system was successful and will be implemented at 20 out of the 23 universities during 2009.  The new system delivered faster crediting of student fee accounts and the automatic updating of student details.

The demand for NSFAS funding exceeded the budget allocation and the amount awarded to each student was at issue.  NSFAS embarked on a complex exercise to develop a model on which the amount allocated to each student could be based.  The required funding extended over several years and the sustainability of NSFAS needs to be assured.  As agreed with the Committee in February 2008, NSFAS re-allocated unutilised funds to other universities.  The co-operation of the universities resulted in the success of this initiative.  The Minister of Education made an additional amount of R39 million available in December 2008 to reduce the amount of outstanding student debt.

In conclusion, Mr Naicker said that NSFAS continued to improve the management of funding to students.  Although the introduction of better technology was beneficial, the development and maintenance of good relationships between NSFAS and the Financial Aid Offices of universities remained the critical success factor.

Discussion
The Chairperson was concerned over the plight of students who were not advised of their final results and who were unable to re-register because they owed the universities money for outstanding fees.  Many students were also unable to register at Further Education and Training (FET) colleges because they could not afford the registration fees.  He asked for comment from NSFAS on these issues.

Mr Naicker explained that the mandate of NSFAS with regard to FET colleges was limited to the transfer of funds from the Department of Education (DOE) to the FET colleges and that all other issues related to FET colleges were dealt with by the relevant directorate within the DOE.  He reported that a meeting to discuss the extension of the NSFAS mandate was held recently with Dr Mahlobo (Chief Director, DOE) and that further discussion to clarify the responsibilities of NSFAS with regard to FET colleges was required.  He said that NSFAS was aware of cases where students were denied graduation because of outstanding fees and had also identified situations where students were unable to graduate because they lacked the funds to complete one or two modules as areas for concern.  NSFAS played a role in making the necessary funds available that allowed students to graduate.  In such cases, NSFAS worked under the guidance of the universities.  NSFAS was considering applying unutilised funds for that purpose and was in the process of developing a policy to encourage universities to allow affected students to graduate.

Mr A Mpontshane (IFP) wanted to know when the policy will be implemented.

Mr Naicker advised that approval for the policy was expected in April 2009, where after the Financial Aid Offices at the universities will be advised.

Mr G Boinamo (DA) asked who qualified for NSFAS assistance and whether the individual economic circumstances of families were taken into account.

Mr R van den Heever (ANC) noted that not all universities had taken up the offer of upfront payment from NSFAS to cover registration fees.  He asked for the assurance that no student who qualified for NSFAS assistance will be disadvantaged if the university concerned had not taken up the NSFAS offer.

Mr R Ntuli (ANC) wanted to know the percentage of qualifying students who were not assisted by NSFAS.  He asked what assistance NSFAS was able to provide to obtain alternative sources of funds for students.  He wanted to know how many students will be funded by NSFAS during 2009 and the total amount of funds available for student loans.

Ms P Mashangoane (ANC) asked what time frames were allowed for students to complete their courses if they only had one or two modules left.  She asked what assistance was provided to students who only found out about NSFAS at the time of registration.

Mr B Mosala (ANC) noted that the University of the Free State was not included in the pilot project promoting the presence of NSFAS on campuses during the registration period.

Mr Naicker gave the assurance that the program will be rolled out to all the universities in the country.

Mr Mosala had personally pledged funds to settle the loan of a student who was unable to repay her loan as a result of family problems.  He had committed his own funds to settle the debt to allow the student to re-register.  He asked if NSFAS had a mechanism in place whereby he could be refunded.

The Chairperson suggested that Mr Mosala submitted a letter and included the details of the circumstances and his motivation for assistance from NSFAS as the delegates would not be in a position to ascertain the facts in order to reply to his question during the meeting.

Mr Naicker advised that a researcher had been employed on a full-time basis and a reference group appointed to re-examine the variables applicable in the NSFAS financial means test.  NSFAS was aware of the changes in the South African economic environment and recognised the need to adjust the means test accordingly.  He said that the development of the new model was complex and did not expect it to be completed before the end of the year.

The Chairperson requested that the current model was made available to the Committee, which Mr Naicker agreed to do.

Mr Naicker said that the offer of an up-front payment from NSFAS was submitted to the Vice Chancellors of the universities.  Discussions held with the Vice Chancellors encouraged the institutions to make use of the offer and to submit claims for the NSFAS funds for qualified students.

The Chairperson said that the issue was that students were required to pay registration fees even if they could not afford to do so.

Mr Naicker replied that NSFAS was in daily contact with the universities and was not made aware that the inability of students to afford the registration fees was a major issue.  He said that NSFAS was aware of students experiencing problems with their academic standing but that issue resulted from the university’s admission policies.  He said that the registration period was currently under way at universities and gave the assurance that NSFAS will act on any problems concerning registration fees if the matter was brought to their attention.

The Chairperson remarked that an understanding was reached with the universities in 2005 that NSFAS students were not required to pay the registration fees.

Mr Naicker said that NSFAS presence on campuses during registration would assist in resolving any difficulties that may arise.

Mr Mpontshane knew of several students in his constituency who were unable to register because they could not afford the registration fees.

The Chairperson suggested that Members contacted the relevant Departments and offices directly when dealing with enquiries at their constituency offices.

Mr Hindle agreed with the Chairperson’s suggestion and said that the DOE continued to review the processes in place.  He pointed out that funding for students at FET colleges only became available late in the year, placing an unfair burden on NSFAS.  He cautioned that NSFAS funding did not cover 100% of the costs involved and that students were obliged to honour their obligations under the contract signed with NSFAS.  Although the DOE was aware of the socio-economic problems of students and the need for a collective response by Government departments, it was unfair to expect NSFAS to take on all the financial problems of students.  He suggested that all the relevant facts, information and any prior agreements entered into were established before Members took up individual cases with NSFAS.

The Chairperson commented on the lack of communication between NSFAS, the Financial Aid Offices at universities and the students concerned.  Students were not kept informed of the progress of their applications for financial aid.

Mr Naicker replied that the issue was raised during the review of NSFAS operations.  NSFAS planned to deliver more visibility to all the parties concerned with the new system.  Students would be able to track the progress of their applications and would be able to see if funding was made available.  He said that donors also required more visibility on the administration of funds and wanted to see when and to whom payment was made.  The manual system was incapable of providing the necessary information but it was anticipated that the new electronic internet-based system would solve the problem.

In response to Mr Ntuli’s question, Mr Naicker explained that NSFAS was in the process of accounting for the 2008 academic year and would be able to report on the number of students, etc. in due course.  He reported that the Chairperson of the NSFAS Board felt that the organisation needed to engage the corporate sector more effectively and a sub-committee was formed to explore alternative sources of donor funding.  Initiatives included approaching insurance companies to make undistributed funds available and setting up a geared fund with a bank for purposes of providing preferential loans to certain categories of NSFAS students.

Replying to Ms Mashangoane’s question, the Chairperson said that the time frames allowed by universities for the completion of modules depended on the relevant institution’s policies and regulations.  NSFAS’s involvement was limited to providing funding to allow the student to complete his course.  He repeated the responses to Mr Boinamo’s questions that were made during his absence from the meeting.

The Chairperson asked if NSFAS applied a formula to determine whether or not a student’s loan was topped up when necessary.  He suggested that qualification for additional funding was pre-determined to avoid delays in settling the student fee accounts.

Mr Naicker agreed that it was important to be pro-active and that the process of making additional funds available could take too long.  He said that NSFAS needed to identify the issues and to determine possible solutions.

Mr Mosala explained that Members’ constituency offices dealt with a variety of problems referred to them by the general public.  He appealed to Government departments and institutions to respond to the queries referred to them and viewed the issues raised as an attempt to provide solutions to problems.

The Chairperson asked for feedback on the issue of impoverished students being required to pay registration fees at FET colleges that was raised during the briefing held on 4th February 2009.

Mr Hindle assured Mr Mosala of the willingness of the DOE to respond to any queries referred to the Department.  In reply to the Chairperson’s question, he said that a meeting was held to discuss the situation at FET colleges and undertook to follow up on the outcome of the discussions.

Dr M Qhobela (Deputy Director-General, DOE) pledged the DOE’s support for Members and repeated the assurance that the Department supported the Committee’s objectives.  He reported that the Minister of Education announced a review of NSFAS during the debate on the President’s State of the Nation address, held on the previous day.  NSFAS was recognised as an important instrument in achieving the nation’s education goals.  The focus of the review was to determine the best structure for achieving the NSFAS mandate and to identify where improvements can be made.  At its inception, an amount of R20 million was made available to NSFAS.  The current budget amounted to R1.2 billion.  The investment in the sector exceeded R2 billion.  NSFAS was responsible for ensuring that such a significant investment reached the people it was intended to benefit and that the desired outcome was achieved.

The Chairperson expressed the appreciation of the Committee for the efforts made by NSFAS.

The meeting was adjourned.