National Student Financial Aid Scheme Presentation to the Select Committee on Education and Recreation 27 August 2014
Presentation Overview Introduction NSFAS mandate and background Student-centred model 2014 loans and bursaries Allocation vs demand 2
About NSFAS The National Student Financial Aid Scheme (NSFAS) is a public entity reporting to the Department of Higher Education and Training, governed by the NSFAS Act (56 of 1999). Since inception, NSFAS has disbursed more than R 41,5 billion in loans and bursaries to 1,4 million students In 2013, NSFAS disbursed R8,7 billion to 416 174 students at the 23 public universities and 50 public Technical and Vocational Education and Training (TVET) colleges throughout the country In 2012, NSFAS disbursed R7,7billion to 383 000 students 3
NSFAS mandate In terms of the NSFAS Act, the organisation s mandate is to: develop criteria and conditions for the granting of loans and bursaries to eligible students in consultation with the Minister raise funds allocate funds for loans and bursaries to eligible students recover loans maintain and analyse a database and undertake research for the better utilisation of financial resources advise the Minister on matters relating to student financial aid perform other functions assigned to it by the NSFAS Act (56 of 1999) or by the Minister 4
NSFAS Transformation Programme background NSFAS funding has increased significantly since the NSFAS Act passed in 1999 Growth from R441 million in 1999 to R8,7 billion in 2013 Financial aid to university and TVET college students has increased substantially in the past 5 years: From R3,1 billion for 191 040 students in 2009 to R8,7 billion for 416 174 students in 2013 NSFAS structures, policies and systems have not kept pace with growth in funds The Loan Management System developed for TEFSA was outdated and not fit for purpose Contributed to the Auditor-General s Disclaimer of Opinion in 2010 The institution-centric system uses an Allocations Formula based on the Full Cost of Study and race to determine financial need, which skews allocations in favour of historically advantaged institutions. 5
Background (Continued) Applications through Financial Aid Offices are not controlled by NSFAS the process developed over time and is deeply flawed requires ad hoc adjustments such as 30% upfront payments students stand for days in queues to apply and get feedback funding is for one year at a time student apply every year for continued funding Fraud and corruption e.g. fraudulent affidavits to support applications Inefficiencies Over, under and late claiming Inadequate documentation Contravention of allowances and terms and conditions NSFAS has never had a direct relationship with students until they have exited Makes it difficult to recover loans and replenish the pool of funds Old systems do not manage information or facilitate reporting Despite the growth in funds, supply still falls far short of demand Institutions disregard the Means Test results and topslice loans This achieves access but hinders success 6
Student-centred model In the new student-centred model: Funding is provided for a qualification, not one year of study at a time Students apply once, in the first year of their studies The financial means test is automated and linked to other government databases to verify personal, family, income and employment data Tuition and residence fees are paid to the university or college Allowances for books, food, private accommodation, transport, electronic and assistive devices are paid directly to students, ensuring that spending can be monitored and accounted for 7
The new student-centred NSFAS model 8
IT model - scope of the new systems 9
2014 Loans and Bursaries 10
Pilot Universities 2014 loans and bursaries University Allocation R Utilisation R * Students assisted DURBAN UNIVERSITY OF TECHNOLOGY 299 571 527 255 603 988 8 300 NELSON MANDELA METROPOLITAN UNIVERSITY 243 662 464 239 220 286 5 403 SOL PLAATJE UNIVERSITY 5 000 000 4 392 200 80 UNIVERSITY OF MPUMALANGA 5 000 000 3 285 836 73 UNIVERSITY OF SOUTH AFRICA 313 222 029 241 179 365 23 841 UNIVERSITY OF VENDA 305 178 259 276 549 595 7 358 TOTAL 1 171 634 279 1 020 231 270 45 055 * At 26 August 2014 11
Pilot TVET Colleges 2014 bursaries TVET College Allocation Utilisation as at 26 August 2014 Students assisted EKURHULENI EAST 49 588 299 43 815 704 4 823 KING HINTSA 19 758 637 19 742 439 1 314 MOTHEO FET 67 943 846 42 309 252 7 600 SOUTH CAPE 25 787 075 20 344 150 2 421 UMFOLOZI 58 412 827 34 602 953 4 337 TOTAL 221 490 684 160 814 498 20 495 12
2014 Allocation and payments Institution Allocation Payments Students Cape Peninsula, University of Technology 283 708 242 155 154 879 4 379 Cape Town, University of 129 987 781 38 739 505 - Central University of Technology 152 464 081 56 892 494 1 177 Fort Hare, University of 269 746 700 166 899 450 3 006 Free State, University of 209 589 721 155 222 862 3 442 Johannesburg, University of 411 695 384 140 644 228 711 KwaZulu Natal, University of 385 735 071 284 095 057 6 047 Limpopo, University of 394 284 340 196 150 967 5 564 Mangosuthu, University of Technology 190 386 619 116 167 193 4 722 National Institute for Higher Education - Northern Cape 15 340 186 12 378 561 296 North West University 259 676 742 221 402 362 5 072 13
2014 Allocations and payments (Continued) Institution Allocation Payments Students Pretoria, University of 243 449 267 223 085 642 4 393 Rhodes University 37 056 221 2 761 000 36 Stellenbosch University 116 194 891 44 338 523 595 Tshwane University of Technology 633 524 412 157 817 386 - Vaal University of Technology 231 534 819 118 172 243 3 906 Western Cape, University of the 191 798 236 176 483 624 4 906 Witwatersrand, University of the 253 959 738 182 534 118 3 154 Walter Sisulu University 375 096 161 167 311 598 4 662 Zululand, University of 302 233 074 169 631 145 5 112 Total 5 087 461 694 2 785 882 844 61 180 14
Pilot first semester findings No paper LAFs and SOPs - The new model has distributed R 1,2 billion in loans and bursaries to 65 550 students at 11 universities and colleges Visibility of spend - R 398 million has been disbursed, including R130 million on student allowances Speed of processing: 81% students received their food, transport, accommodation and book allowances within 7 days New systems - Phoenix, Cordys, OpenText and Accpac implemented New processes - for applications, admission of returning students, funder-selected admissions, debtor servicing and disbursements implemented 15
Pilot first semester findings Student-centred model has high dependency on accurate student and institutional data. This has been a serious challenge for most universities and colleges in the pilot phase. Alignment of dates where data or action is required needs to be reworked, particularly for funder-selected bursary students Adjust process for colleges to facilitate walk-ins and late registrations as few students apply before registration period. 16
Rollout Readiness For the student-centred model to be rolled out, the following prerequisites need to be in place: Full operational capacity within NSFAS NSFAS representatives at institutions Institutions to have: Required skills Assurance of data quality Integration to institution s systems System enhancements Relevant policies to be in place 17
Allocations vs demand NSFAS plans to meet the increased demand from the number of students enrolled at universities and colleges in the following ways: More efficient use of the allocated funds, including ensuring that funds reach the intended beneficiaries and are spent on intended categories of allowances books, travel, food and accommodation Improving collections of student loans to replenish the pool of funds available Increasing funding from government Fundraising from private sector funders now that reliable, appropriate systems to manage and account for funds are in place. 18
Questions and discussion The doors of learning and culture shall be opened! Freedom Charter, 1955 White Paper on Post school Education and Training, 2013 19