In June 2009, I appointed a Ministerial Committee led by Professor Marcus Balintulo to review the National Student Financial Aid Scheme (NSFAS). The review was prompted by several challenges related to the important goals of access and affordability. The review focused on a specific set of terms of reference which included a focus on the administrative capacity of NSFAS which had not kept pace with growth in terms of the size of the state’s investment in financial aid. It represented a tenfold increase in the NSFAS budget between 1999 and 2010.
In addition, there were several areas ranging from concerns regarding the growing number of blacklisted borrowers, the urgent need to assess short, medium and long term growth requirements of the fund to increase access, particularly of poor students and in addition there was the imperative to review the distribution and allocation policies and mechanisms of the fund. This report by the committee is now complete and has now been submitted to the Department of Higher Education and Training (DHET) for consideration.
The scope of the review mandated the committee to assess the strengths and shortcomings of the current scheme and to advise the minister on the short, medium and long term needs for student financial aid to promote the twin goals of equity of access and providing free undergraduate education to students from working class and poor communities who cannot afford further or higher education.
The terms of reference requested the committee to:
* assess the strengths and shortcomings of the current NSFAS
* conduct a needs analysis of students who will require financial aid in the short, medium and long terms, taking into account the government's commitment to providing free undergraduate education to students from poor families who would otherwise not be able to pursue further or higher education
* undertake a review of the means test and provide guidelines to determine the criteria for eligible students
* make recommendations on appropriate mechanisms for raising and administering the required funds, including the parameters of the recapitalisation of NSFAS and for the possible establishment of a student loan bank
* investigate the feasibility of student financial aid being linked to priority fields of study and levels of academic performance
* assess the viability of extending financial aid to students in not for profit private higher education institutions (HEIs)
* assess the nature and extent of former and current students blacklisted by NSFAS and universities and recommend appropriate action to be taken to deal with the problem
* recommend changes to the policy, regulations and operational framework of the NSFAS, including the distribution formula for the allocation of financial aid to institutions, the means test, the respective roles and the responsibilities of the institutional financial aid bureaus and the NSFAS
* recommend changes to the governance, management, operational capacity and systems of the NSFAS to meet the needs of the new policy framework
The report focuses on aspects related to the governance, administration and management of the NSFAS and more critically, on the policies, systems, structures and regulations that govern the scheme. The recommendations pertain to both the higher education sector and the further education sector. Some of the committee’s key findings show that the amount of NSFAS funding available falls far short of demand and that there are significant gaps between the NSFAS award and the full cost of study for many students. This underfunding is a contributing factor to the high attrition rate in our university system. The report highlights the need for the DHET to revisit the access and success debate and makes several proposals in this regard. In addition, there are many families who cannot afford higher education but whose income is above the threshold of R122 000. This is referred to by the committee as the ‘missing middle’. There furthermore is a definite need to strengthen the capacity of loan administration at NSFAS but also in financial aid offices.
The committee made a number of recommendations, which include:
* The development of a comprehensive policy framework to articulate the detail of the national policy imperative of progressively providing free higher and further education to the poor
* The strengthening of governance and administration of NSFAS
* Simplifying the means test as well as the institutional allocation formula
* Reviewing the NSFAS loan recovery practices
* A review of funding of higher education and the link to the rising cost of study at institutions
* The inter-relationship between access, affordability and success
* An audit of the NSFAS loan book
* Practices of loan recovery to be compliant with legislation and the Constitution
* finding a solution for the “missing middle”.
The full list of recommendations can be found on page 124 in Chapter 10 of the report.
I wish to acknowledge the difficult task of the Board of NSFAS over the years, particularly as members do this on a voluntary basis. I thank them for their work. It is my fervent hope that the recommendations of the committee leads to the strengthening and improved functioning of the Board.
The Review Committee has now completed its work and I would like to extend my heartfelt appreciation to Professor Balintulo and his team for the intensive work they undertook during the review, including an extensive consultation process with stakeholders as well as the commissioning of several research pieces which have informed the study. I believe that the comprehensive report they produced will serve as a valuable reference point as we pursue our mission to ensure that no poor, academically deserving student is denied access to higher education and that the operations of the fund are efficient and effective.
There is considerable public interest in this review as there are many thousands of young people in our country who are dependent on financial aid to access higher education. We value the voices of all these people as well as our stakeholders. The process that will be followed now that the report has been received is that we release it today for public comment and invite all interested parties to engage on the findings and recommendations. This process of engagement and consultation will assist us as we study and prepare our response to the report.
We have presented the summary of findings and recommendations of the committee to Cabinet last month and I will report on our final response, including recommendations and an implementation plan, to Cabinet once we have concluded the period of public consultation. Our intention is to take the matter before Cabinet by the end of August.
There are, however, some matters which arising from the recommendations requires our immediate attention. These include simplifying the means test to uniformly be applied at all institutions; revisiting the institutional allocation model, reviewing the funding formula and framework for universities; commissioning research into the inter-relationship between affordability, access and success and the appointment of a task team to look into several recommendations by the Committee on loan recovery by the South African Revenue Service and solutions for the missing middle. These issues will be acted on urgently.
This is the first step taken by government to realise the commitment of the ruling party to progressively introduce free education for the poor until undergraduate level. The review of the NSFAS was undertaken in fulfilment of the resolution of the governing party to encourage students from working class and poor communities to go to tertiary institutions by reviewing and improving the National Student Financial Aid Scheme.
Electronic copies can be viewed and downloaded from the Department of Higher Education and Training’s web site from tomorrow, 17 March 2010. To access this, go to http://www.education.gov.za on the homepage under “What's New”. All interested persons and organisations are invited to comment on the committee report in writing and to direct their comments to:
The Director-General
Private Bag X895
Pretoria
0001
For attention:
J Cedras
Tel: 012 312 5207
E-mail: cedras.j@doe.gov.za
Fax: 012 323 7532
Comments must reach the Director-General on or before 30 April 2010.
Enquiries:
Ranjeni Munusamy
Tel: 012 312 5555
Cell: 082 898 6082
E-mail: munusamy.r@doe.gov.za
Issued by: Department of Higher Education and Training
16 March 2010
