By Thebe Mabanga
The National Student Financial Aid Scheme faces a R10,6 billion funding deficit and trust deficit from key stakeholders, while attempting to extricate itself from costly agreements for its head office and review deals with landlords and payment service providers.
At a news briefing led by the board chair Karen Stander and acting CEO Waseem Carrim, it was announced that NSFAS had identified six priorities to turn the scheme around. They include organisation design and realignment, loan management strategy, a sustainable funding framework, transitional framework for student accommodation, ICT assessment and digital transformation strategy and a revised business operating model.
Carrim announced that NSFAS currently has funding of R39 billion for the university sector and had disbursed R29 billion, or 73%, but has R10,6 billion shortfall. For the TVET sector, NSFAS has R9 billion and has paid out R6 billion, or 70%.
The R10,6 billion is a result of oversubscription to university allocation, which is caused by what Carrim calls a “perfect storm” in higher education.
Firstly, the number of bachelor’s passes has increased, which while welcomed, meant a higher demand for university places.
The second element is that many families are still reeling from a cost-of-living crisis that pushed them into the eligible income bracket.
Lastly, Carrim said that government resources were declining in real terms.
He said they had sources they would tap into at least to plug the current year’s gap, but they needed Treasury and Department of Higher Education to use them. He did not provide details or examples and did not respond to a follow-up request for comment.
“It is important to stress: this is a shortfall, not a bail-out. The new board and acting CEO are committed to correcting this course,” said Stander.
Student accommodation has been a particular headache for NSFAS, with the body currently reviewing contracts with intermediaries that have already been paid significant amounts, but at the same time there is still a shortfall to pay landlords. This has left students facing the prospect of eviction.
To resolve the accommodation crisis, Carrim said NSFAS did not want to “pass students around”, instead the country must have a student accommodation framework that would guide standards and costs between rural and urban areas.
A key change to NSFAS now is to decentralise its operations so that it is closer to institutions, and so that it can relocate its head office from Cape Town to Tshwane, which is considered the country’s student hub with 400,000 students
“NSFAS is widely recognised as one of the most impactful social support initiatives of the democratic government. Through NSFAS, government has empowered hundreds of thousands of students from impoverished and working-class communities to pursue higher education and realise their families’ aspirations,” said Stander.
With funding for 783,000 students across universities and TVET colleges, Carrim described NSFAS as “the largest bursary scheme in the world”.
Stander said the board’s immediate task was to “stabilise and enhance” NSFAS’ operation by filling all executive posts and approving control recruitment for critical posts below executive level.
On NSFAS sustainability, Stander noted: “Our mission is not only to fund students today, but to ensure that the children of tomorrow also have access to the same opportunities.”
She said this could be achieved by supporting a higher proportion of students to succeed, graduate and eventually contribute as taxpayers.
Stander said NSFAS would aggressively raise funds from the government and the private sector as well as improve its loans collection.
The ability to raise funds through partnerships was granted in 2018 when NSFAS changed its funding model to full bursary scheme in the wake of the Fees Must Fall protests, but Stander said this has not been fully utilised.
Collecting on its historical R45 billion loan book has been a challenge for the scheme.
Graduates who were employed and earned above R30,000 must repay their loans “not just as debt to NSFAS but debt to society”, according to Carrim, who conceded that debt collection must be tightened and enforced.
The NSFAS leadership also announced that the funding criteria was being refined so that it could cater for a wider category of students, while staying within its budget and not omitting deserving students
Stander announced that the scheme’s annual performance plan and five-year strategic plan were submitted to Parliament on time, correcting a long-standing anomaly and addressing issues raised by the Auditor-General.
“This marks a decisive step towards institutional stability and accountability.”
The chairperson, an economics and business strategy academic by background, stated that the new board inherited “an organisation facing significant challenges, including a collapse in financial and supply chain governance, compounded by the absence of a sustainable funding model focused on impact”.
“The organisational design has not evolved in tandem with changes in funding structures, leading to breakdowns in human resources management and the absence of a cohesive organisational culture,” she said.
The board has strengthened governance by approving and implementing 12 new policies over the past quarter.
NSFAS said it has received 87,000 for the current academic year and 38,000 have been successful. However, about 7000 of these, which relate to institution payments, cannot be paid due to insufficient funds.
INSIDE EDUCATION
