SOUTH AFRICA: Fund rescues non-fee-paying graduates

A R200-million (US$25.5 million) fund to provide loans to nearly 20,000 graduates whose degree and diploma certificates have been withheld by educational institutions because of outstanding fees, is among a clutch of recent initiatives by the South African government to boost the efficiency of the National Student Financial Aid Scheme and broaden its reach.

According to information produced by the Department of Higher Education and Training (DHET) earlier this year, failure to settle outstanding fees has cost 19,479 graduates at South Africa's 23 public higher education institutions the right to receive their degree and diploma certificates over the past 10 years and is affecting their chances of finding employment.

The total value of the fees outstanding is R166 million (US$21 million).

While most universities, if asked by a prospective employer, provide a confidential report indicating that the requirements for qualification have been met, the lack of certification makes it more difficult for graduates to land a job, exacerbating concerns about an already high rate of unemployment in the country amid a pressing skills shortage.

Dr Blade Nzimande, minister of higher education and training, said recently that "a number" of graduates had applied for the special loan funding, announced in the minister's May budget speech, through the financial aid offices at their respective institutions.

In July, it was reported by the New Age newspaper that no applications for loan funding had been received by the National Student Financial Aid Scheme (NSFAS).

In response to a request for an update on applicant numbers and other issues relating to student finance, NSFAS spokesperson Bonny Feldman told University World News that she had not received feedback from the NSFAS board and was unable to provide the information.

What is known is that the scheme has a current budget of R5.5 billion and in 2010 provided financial aid to 210,000 students at 23 universities and 50 further education and training colleges.

There has been trouble at the student aid scheme, which is key to enabling access to higher education for hundreds of thousands of students from disadvantaged backgrounds.

The board of the NSFAS was restructured last December by Nzimande, in response to financial management problems identified in a disclaimer last year by the auditor-general. A turnaround strategy for the scheme culminated earlier this month in an unqualified audit on the scheme's annual financial statements.

In a statement at the launch of the NSFAS annual report, Nzimande said the move from an audit disclaimer in 2010 to the unqualified audit in 2011 "vindicated" his intervention in and reconstitution of its board following "years of neglect and mismanagement".

Nzimande said executive and senior management posts were currently being filled after CEO Ashley Seymour's dismissal in April, which was followed by other resignations, and a new loan management system would be put in place. Systems and operations were also being improved, he said.

While welcoming the unqualified audit opinion, Democratic Alliance shadow minister of higher education and training Junita Kloppers-Lourens said credit for the audit improvement lay with Seymour, who had only been in the job for a while before being dismissed. The new NSFAS board, she said, "has been in disarray" and was only reconstituted within three months of the end of the financial year.

"Seymour should be seen as primarily responsible for the NSFAS' receipt of an unqualified audit in 2010-11. The NSFAS' 2011 audit improvement plan was developed by Seymour, and he hired three qualified chartered accountants to assist in the entity's improvement. All three resigned after the minister reconstituted the board with members of his own choosing."

It was difficult not to conclude that Nzimande had "axed the man responsible for NSFAS' newfound stability," said Kloppers-Lourens in a statement.

Among the problems identified that related to financial management were irregular expenditure of R25.6 million, the incorrect calculation of interest income of R181 million when it should have been higher, and a miscalculation of the value of the R5.2 billion NSFAS loan book.

Nzimande said a recalculation of every student loan on the scheme's books confirmed that the NSFAS had overcharged interest on some loans in previous years. A provision of R77.8 million has been made in order to refund the students - reported to be around 34,000 - who were overcharged.

Among the scheme's plans over the next three years are to increase the amount of money available to prospective students for both loans and bursaries.

"Our plan is to grow this number [of beneficiaries] substantially, as part of realising the goal of progressively providing free education for students from poor families, as mandated by the ruling party," Nzimande said in his statement.

The plan is also to widen the definition of students who are eligible for student financial aid. Thus, postgraduate students are set to receive a further R50 million to complete honours, masters and doctoral degrees.

In addition, for the 2011 academic year, R76.8 million has been provided to increase the funding available to students with disabilities and learners with special needs.