SOUTH AFRICA: Student anger over unused loan money

Students in South Africa have reacted with anger to news that universities have returned at least R50 million (US$6.2 million) in funding earmarked for study bursaries and loans to the National Student Financial Aid Scheme, or NSFAS. The money could have helped secure a funded university place for some 5,000 additional poor students last year. But universities are not entirely to blame, says NSFAS Chief Executive Officer Pragasen Naicker – with growing numbers of bursaries tied to scarce-skills courses, and some bursary funding coming in late, it is extremely difficult to match all bursaries with needy students at all universities.

Study bursaries and loans worth R1.6 billion were awarded to disadvantaged students in 2007, benefiting well over 120,000 students, and the numbers are growing annually. The R50 million returned to the NSFAS was bursary and loan money unspent during 2007.

But the awards do not cover the full costs of study, causing many students to drop out and others to be excluded from universities because they cannot pay off mounting debts. This, along with rapidly rising tuition fees, prompts protests at the start of each academic year.

So it is not surprising that the South African Students’ Congress (Sasco) condemned “in the strongest possible terms” the return of bursary and loan funding to the NSFAS. “The reason is simple, universities are failing poor students who desperately need financial support,” it said in a statement last week.

Sasco said it had “consistently raised the insufficiency of NSFAS and the inefficiencies of universities to administer the scheme at campus level”. It called on campus branches to raise the problem of university inefficiency “sharply on the ground” – a daunting prospect for universities that have been hit by waves of tuition fee protests since late last year.

The NSFAS is the repository for both government and donor money committed to funding higher education study for black South African students from disadvantaged families. It sets funding budgets for individual institutions and makes lump bursary and loan payments to them before registration, usually in February. Using various criteria, universities award bursaries and loans to needy students who successfully apply for study places.

Universities may only allocate NSFAS funds to students once they have exhausted all other funding they have for bursaries – many universities also award bursaries out of their own funds, and receive student funding from a range of external sources such as donors and companies.

One reason for the recent return of R50 million to the NSFAS, CEO Pragasen Naicker told University World News, was that external funders sometimes make money available later in the academic year: universities return equivalent funds to the NSFAS.

“Another reason is that we are receiving more money for bursaries and loans tied to specific conditions, especially to study in areas of scarce skills,” Naicker said. “Previously the bulk of our funding was for general education. Universities are often unable to attract enough students onto a specific scarce skills programme to cover all the bursaries available, and so return the money to us.”

For instance the national Department of Education has provided bursary funding specifically for trainee teachers, and the Department of Social Development for training social workers. Companies that channel bursary funding through the NSFAS also often stipulate that it be awarded to students in, for example, the fields of accounting, commerce or engineering.

Further, Naicker said: “Sometimes donor funding becomes available quite late – too late in the registration process for university offices, already under pressure at this time of the year, to be able to allocate all of it. It is complex situation.”

Funds returned to the NSFAS, he pointed out, do not get lost to the system: “The money gets allocated next time around.” And at the end of the day, almost all the money gets to needy students: out of a budget of R1.2 billion for 2006, only R6 million was not spent.