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Gov sets aside billions to fund students skipped by NSFAS

  • Minister Blade Nzimande has revealed that the in-development comprehensive student funding model has received the first round of seed funding.
  • The new model is supposed to help fund those students who require funding for their studies but do not meet the criteria of NSFAS.
  • Nzimande says that the new model should begin its second phase next year.

At the start of 2023, President Cyril Ramaphosa said during the State of the Nation Address (SONA) that South Africa’s government was close to completing its plans for a new student funding model that would aid the tertiary education of young people who were not eligible to receive funding from the National Student Financial Aid Scheme (NSFAS).

Now nearly a year later, government has issued an update to the so-called “comprehensive student funding model” which is set to help fund the students in the “missing middle” – students who struggle to afford tertiary education but are more financially well off than those that meet the criteria for NSFAS ie. those who come from families who have a total income of more than R350 000, but not more than R600 000 per annum.

On Monday, Higher Education Minister Blade Nzimande revealed, as per SA News, that government has already set aside R3.8 billion to grant funding in this comprehensive model as the first phase of the model is set to begin in the 2024/2025 year.

Of the R3.8 billion the entire model will receive, R1.5 billion comes from the National Skills Fund (NSF) and R2.3 billion will be sourced from Sector Education and Training Authorities (SETAs). The total amount will be able to support the education of 47 percent of the estimated total number of missing middle students in South Africa, or 31 884 of 64 446 total students.

Nzimande has said that the Department of Higher Education is already in consultation with National Treasury, university vice-chancellors and student leaders on how best to implement this new scheme.

How is the comprehensive student funding model different

Unlike NSFAS which is a bursary scheme, the new model will be loan-based – this means that funds will have to be repaid to the government on an agreed upon time period.

To qualify for the loan, students should meet the following criteria:

•    “Students whose annual household income is between R350 000 to R600 000;
•    Technical Vocational Education and Training (TVET) and public university students;
•    Undergraduate or postgraduate students;
•    Have achieved 70 percent grade in science, technology, engineering and mathematics (STEM) programmes (which may be adjusted to include commercial programmes that are in demand in the labour market or entrepreneurial programmes);
•    Have achieved 30 percent in Humanities programmes; 
•    Students willing to sign a loan agreement;
•    Students can apply for the loan in the first, second or third year to continue to be funded through the loan.”

According to the department, students are expected to get an average of 60 percent pass rate for the loan to be able to cover tuition, learning material and accommodation. However, if they are able to maintain a 70 percent or above pass rate without extending their studies then they will get a 50 percent reduction on loan requests.

“The department will ensure that the seed funding contribution by government is increased to R31.6 billion to R42.1 billion over 10 years. This is approximately R3.1 billion to R4.2 billion annually,” said Nzimande.

The situation at NSFAS

The minister of higher education is currently embroiled in a more-than-year-long fiasco surrounding NSFAS. Last year the scheme launched a new direct payment system which was met with public outcry and was soured by allegations of corruption, maladministration and negligence on the part of those involved with NSFAS and student funding.

In 2024, the NSFAS projected budget is nearing R41.9 billion. With the NSFAS chairman now taking a leave of absence to address corruption allegations that also implicate Nzimande, should students continue to trust those behind the NSFAS mess to launch a new billion Rand student funding scheme?

It was revealed in an internal NSFAS investigation that the scheme’s leaders did not even conduct a feasibility study before completely remaking a funding model that supports more than 1 million young people. Where will the checks and balances be in the launching of this new loan-based funding model?

This new model is still in the planning stages so there is nowhere right now where you can apply for a loan. The second phase of the comprehensive student funding model will begin in 2025 and continue up to 2034 for now.

[Image – CC BY-ND 2.0 GovernmentZA on Flickr]

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