This follows the recommendations made by the Presidential Task Team on the Funding Challenges at Universities, which was appointed by President Jacob Zuma on 6 October 2015.
The task team was appointed to investigate and make recommendations on short-term student funding challenges at universities. It also had to advise on a short-term plan to mitigate possible student protests and unrest at the start of the 2016 academic year.
In a report presented in December 2015, the task team recommended that a process must be put in place immediately to develop a new financing model, which includes the private banking sector and other business interests to incorporate options for funding the “missing middle” to provide loans at favourable interest rates without having to provide surety.
“This must be developed during 2016 with the view to testing it in the 2017 academic year for full implementation in 2018. Investment should be solicited from the full range of stakeholders to enable implementation on the scale required,” the Presidential Task Team recommended.
Briefing the media on the 2016 budget allocations and administration processes for additional funding on Thursday, Chairperson of the National Student Financial Aid Scheme (NSFAS) Sizwe Nxasana said that the new model, which will be placed under the chairperson of the NSFAS board, seeks to provide loans and bursaries to the current NSFAS qualifying university students and the “missing middle”.
With the new model, Nxasana said NSFAS will look at household income and how many people are in the family.
“It will build modules to determine how much the family can really afford. It will also look at the issue of high dropout rate, especially for poor students,” said Nxasana.
As per the task team recommendation, the model is planned for piloting in the 2017 academic year with full implementation expected in the 2018 academic year.
Meanwhile, working with the Department of Higher Education and Training, NSFAS has approved a new more inclusive policy on disability.
“We have taken into consideration other forms of disability that may be crucial in determining and assessing the kind of assistance we should provide in addition to paying for tuition and other allowances,” said Nxasana.
Nxasana also announced that the Human Resources Development Council -- chaired by the Deputy President -- is developing South Africa’s human resources strategy, which will identify some critical and scarce skills required to support the National Development Plan.
“What is required is to better align the strategies of the various stakeholders to produce these scarce skills. These stakeholders include the Department of Basic Education, universities, TVET colleges and NSFAS on the supply side, and the employers and programmes which support entrepreneurship on the demand side.”
Since the launch of its campaign to collect money owed to it in October 2015, NSFAS has collected an amount of R8.5 million from 12 000 first time payers.
NSFAS Executive Officer Msulwa Daca said the repayment new terms are now based on the salary that is earned and this would start once the salary is R30 000 or more per year.
“This means that a debtor would start payment at 3% of the annual salary, increasing to 8% or more when a salary reaches R59 300 or more per year. A beneficiary will pay back R900 a year on a salary of R30 000 a year or R84 per month.
“Interest is charged at 80% of the repo rate, which is the purchase rate at which the Reserve Bank lends to commercial banks. NSFAS will continue to charge interest on all outstanding balances,” said Daca, emphasising the importance for beneficiaries to start repaying loans as soon as possible.