Revamped aid scheme gives more support to more students

South Africa’s National Student Financial Aid Scheme, or NSFAS, is being substantially overhauled to pave the way for assistance for a broader range of deserving tertiary students while recognising government’s responsibility to eliminate structures that lumber university drop-outs with loan repayments.

Addressing the second annual Siyaphumelela Conference on student success, held in Durban from 28-30 June, NSFAS Chair Sizwe Nxasana said South Africa has established an integrated human resources development strategy that can identify what the country must do from a human capital viewpoint to achieve economic growth rates of 6% and more.

The new NSFAS model looks to address these issues, recognising that the institution’s historic situation was not geared to facilitate the R15 billion (US$1 billion) with which it is currently operating. It had previously approached issues like a non-government organisation.

The new model

Nxasana said the original model aimed to assist students with funding and students repaid the loans on entering the workforce. But that system did not reflect how students required assistance during their tertiary education.

A ministerial task team was seeking to address the gaps in NSFAS to better meet the criteria for which the fund was intended.

However, while NSFAS had once attracted private sector and donor funding, the fund’s poor reputation and limits within the laws governing its operation had seen this element disappear.

The new model sought to reintroduce a broader funding base with investors securing a return on their investments.

Nxasana said funding decisions will also be aligned with the country’s national demand and the National Development Plan that identifies South Africa’s scarce skills. It will also deal with drop-out rates to minimise the number of students not completing tertiary education.

The new model establishes a government student education bond where investors earn a return based on the interest accrued on the loan component.

NSFAS will introduce a new means test to include a broader spectrum of deserving students. Previously the fund only accepted students from households earning less than R120,000 (US$8,000) annually, but this will double to R240,000.

Grants-based with full support

The previous system was also loans-based, meaning students dropping out the system carried the burden of repaying loans when they had limited earning capacity.

Nxasana said the new system will be grants-based with first-year recipients being wholly granted the funds and, as they passed through their tertiary education and were thus less likely to drop out of university, the weighting will shift towards a loan.

“It goes without saying that students coming from households living on government grants cannot be expected to pay towards university fees, specifically at the bottom of the education scale,” he said.

The new model also guarantees full student support including accommodation, food and books and can be tailor-made to support a student’s specific issues. This recognises that a medical degree requires different support structures to an engineering or arts-based one.

Nxasana said key to South Africa’s future success was balance – and that means the country has to encourage sufficient students to pursue careers in science, technology, engineering and mathematics, as these form the foundation for the industrial and corporate environment.

A central higher education application system can ensure that balance is achieved and can also pre-approve students for career choices based on their education background and grounding, specifically their schooling. Nxasana said the quintile school from which they had matriculated typically reflected their abilities.

“The bottom line is we have to give students a better chance to contribute towards our society,” he said.