Parliament wants private sector to bail out student fund

Parliament’s new portfolio committee on higher education plans to shake the embattled students’ loan scheme out of its comfort zone and encourage it to embark on a vigorous fundraising drive.

Yvonne Phosa, who chairs the committee, told the Mail & Guardian in an exclusive interview that sourcing funds from the private sector rather than just from the government is the only way to throw a lifeline to thousands of poor students financially excluded from universities. 

Battling a cash shortfall, the National Student Financial Aid Scheme (NSFAS) this year only managed to fund half the university students who qualified for its loans and bursaries, yet “one of their objectives is to fundraise”, as Phosa pointed out, and not just rely on the government’s budget. 

The scheme only has one private-sector funder, the Nedbank Group, NSFAS chief executive, Msulwa Daca, told the committee last month. The Nedbank Group’s R14.1-million cash injection sponsored 80 bursaries in 2011. 

But this week Daca’s office did not comment on the matter, despite confirming receipt of emailed questions. 

Fundraising strategy
The M&G asked Phosa, whom the ruling ANC deployed to the National Assembly following elections this year, what  the committee’s assessment was of why the 15-year-old NSFAS did not have a pool of funders. 

“To be honest, they told us [during a committee meeting] that they’ve got fundraising plans. Ours, as we’re new, was to believe what they are saying,” she said. 

“For now we asked them what are they doing; they said they’ve got a fundraising strategy. So in the next meeting, as they’ve committed themselves, we’ll ask how far have they gone with their strategy? 

“And actually, we’ll write to them to say ‘submit your fundraising strategy’. If they’re just talking by mouth, now we’ll catch them. That would be a catch.”

Phosa stressed that the private sector should be brought on board to expand NSFAS’s funds. 

The government’s allocation to NSFAS has increased from R3.1-billion in 2009 to just less than R9-billion next year. This includes R3.9-billion for university student loans and R2.1-billion for college bursaries. 

Partnerships needed
But the recurrent student protests at public universities and colleges over financial exclusions are a blunt reminder that the government’s allocation is inadequate. 

Phosa said the resolve to unlock private-sector donations is based on an understanding that the government’s “resources have never been sufficient”. 

“There are always these competing needs. So, in this case, we said, ‘let’s look at partnerships with private sector’. Yes, government has been able to provide so much, but we cannot solve these problems alone. The pressing need is to now find partners.”

But this is a government that claims to be working towards the introduction of free university education. ANC leaders repeat this promise regularly when campaigning for votes. So why turn to business now?

“The angle that I’m advancing is that we’re all responsible to build this nation. As government we’ve done a feasibility study of what are the needs and the magnitude, and we’ve provided the budget [for the NSFAS] that is insufficient,” Phosa said. 

A national problem
“It’s insufficient because the need is big. And if the demand is big, you can’t fold your arms or throw tantrums — you [ask] what is another, alternative solution to this problem.”

“We’re now saying the alternative solution is to find partners in business. And I know that as long as we can be able to inform business about this problem … we’ll partner to solve it.”

The shortfall of funds at the NSFAS is a national problem, she said. “We’re building this nation, our nation. The more people get educated, the more we’ll be able to address the socioeconomic challenges of this country.”

Higher Education South Africa (Hesa), the body that represents vice-chancellors of the 26 public universities in the country, recommended five years ago that the NSFAS should “aggressively” raise funds. 

It advised the body to establish “a small team of dedicated NSFAS marketers to spearhead such fundraising strategies”. 

Students growing impatient
Hesa’s chief executive, Dr Jeffery Mabelebele, told the M&G: “As raised in 2009, Hesa believes that the NSFAS needs to move into the domain of targeted fundraising far more aggressively than it has done so up till now. We reiterate our call for more funds to be mobilised for the NSFAS, including funds that are currently in the private sector.”

Millions of rands currently in coffers of the 21 Sector Education and Training Authorities (Setas) should be redirected to the NSFAS, said Mabelebele. 

“The considerable amount of funding held by Setas through the National Skills Fund could be used very effectively in addressing our country’s skills shortages, if a portion of this funding could be channelled to NSFAS or at least, set aside for administration by NSFAS.”

Phosa pleaded with students to tone down violent protests at campuses. The 2014 academic year started with strikes at various institutions over funding, and they have flared up again at the University of Limpopo’s Medunsa campus, Mangosuthu University of Technology and the University of Fort Hare.

“We’re addressing [the shortage], but can they allow us this phased-in approach so that we end up being in a position to fund all those students who meet the requirements?” Phosa asked.

“We must educate our children about democracy. Do you know that they can write to Parliament, they can write to the committee? Already I’ve received two letters from students who were complaining about NSFAS.” 

“I’ve referred both letters to the chairperson [of the NSFAS board] and said to him, ‘tell me what are you doing about this situation.'”

Any correspondence from the public to the committee will be treated as a petition, she said. “So, we’re bound to respond. I’m trying to say there are many ways of killing a cat, rather than drowning it in cream.” 

“Now they are destroying buildings. That is taking us back. It’s not like government hasn’t been doing anything. It’s just that indeed we work with limited resources.”

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