SOUTH AFRICA: Aid disbursement fails many students

Eligible but financially needy students continue to be excluded from South Africa's higher education institutions. More than 16,000 students failed to access government funds last year alone - a 45% increase over the previous year - according to government figures.

The country's official opposition has blamed the disbursement authority, the National Student Financial Aid Scheme, or NSFAS, which was recently the subject of a government-commissioned review. If cabinet accepts the review recommendations, the scheme will need R5.2 billion (US$708 million) annually in state funding against a current R2.2 billion.

The scheme, which has assisted more than a million students since 2000, has been allocated approximately R3.3 billion for the 2010 academic year. The question is whether it, and universities, will be able to allocate a larger pool of funding.

Democratic Alliance shadow minister of higher education, Dr Wilmot James, said in a recent statement that the number of students denied access to financial aid had risen by 45%, from 11,120 in 2008 to 16,172 in 2009. The figures were released in response to a parliamentary question asked by the party.

James, a former academic, claimed there was a trend towards the NSFAS not spending the money allocated to it, or not ensuring it was spent by tertiary institutions. Two years ago an "unacceptable" R40 million (US$5.2 million) in financial aid was returned to government.

But Bonny Feldman, NSFAS communications and development manager, said the figures painted an inaccurate picture.

"In the 2009 academic year, 99% of loan moneys were utilised and this represents an improvement in utilisation from the previous year," she said, adding that the non-utilisation of some of the money available had nothing to do with the need for funding among students.

The review of the scheme found that some R50 million a year - enough to fund around 1,000 students - was routinely unspent. With the amount of funding increasing, this implies that the proportion of unallocated funds is decreasing. It reported:

"Unspent funds accumulate as a result of a number of deficiencies in the NSFAS system, including funds not being utilised at one higher education institution but not being reallocated timeously to another, funds arriving too late in the year to be taken up by students, and students being granted loans but then not signing a credit agreement."

Feldman told University World News that the scheme did not work with a targeted number of students. Rather, funding was based on the amount allocated to NSFAS.

"Each university receives a bulk allocation from the total, and they then divide these funds up among the students they have identified as qualifying for funding. The amounts differ for many reasons, one of which is that fees are different for different courses and different at different universities," Feldman explained.

She said the scheme was not aware of the number of students who were denied funding, as universities and colleges handled the applications.

"NSFAS only sees the forms of those students who have been identified for receiving funding and who have entered into a contract for a loan or bursary."

Demand for funding outstripped the supply of funds and many students could not be assisted, Feldman stressed. "The costs of education are high, and so the majority of students are unable to fund their studies themselves."

She said there was no simple solution to the problem of resources: "If the state can make more money available for the NSFAS to administer, then this will assist with the matter. But one needs to remember that education is competing with various other sectors of the economy for what is in the state coffers," she said.

Feldman said various proposals for other funding models had been made by the NFSAS review committee. But these were proposals only - "a long way off from an actual, implementable solution".

Wilmot James also called for the financial aid threshold of the NSFAS to be shifted from R120,000 to R160 000 per student.

The current threshold has been blamed for many student drop-outs, as it does not always cover the full costs of fees and other university and living expenses, and many families cannot afford to make up the difference. Another problem identified by the review was institutions diluting loan amounts to individual students in order to allow more to study.

"The funds are available, the students are willing, the NSFAS must now do its job and make sure that the funds are correctly distributed," James said.