Get more Mail & Guardian
Subscribe or Login

​Student aid funding scheme may have a new future

The National Student Financial Aid Scheme (NSFAS) could soon be forced to take a backseat if Cabinet endorses plans for a new entity aimed at harnessing private sector support.

The development of a blueprint known as the Ikusasa Student Financial Aid Programme proposes the establishment of a public-private partnership arrangement between NSFAS and a new special purpose vehicle, a private management company, ManCo.

A ministerial task team appointed by Higher Education Minister Blade Nzimande to look into the creation of a support and funding model for poor and “missing middle” students devised the strategy. Missing middle students are those deemed too well-off to receive NSFAS funding but too poor to pay for their own tuition.

Chaired by former FirstRand chief executive Sizwe Nxasana, the task team gazetted its report for public comment on Thursday last week.

The relationship between NSFAS and ManCo would be crucial for several reasons because, according to the report, “given NSFAS’s legacy issues it will be very difficult to restore the confidence of the private sector to start funding NSFAS”.

Diane Parker, deputy director general for university education in the department of higher education, said that, although there was “a noticeable improvement” in the functioning of NSFAS in the recent past, “at the present time, the private sector does not have the confidence in NSFAS systems to simply invest at the levels required and let NSFAS take complete control”.

“The private sector is risk-averse and wants to have some guarantees that its funds will be well used. While over the long term NSFAS may well meet these requirements, at the moment that confidence is not there,” she said.

The new entity needs an aspirational brand, reputable operations and evidence of recoverable loans to attract private funding.

“The known NSFAS operation has many challenges, has many negative public views regarding the recovery rate of loans and, according to the funding experts, would not be appetising to private investors,” says the report.

Ikusasa’s vision is to be a government-investor partnership with an operating model “that is inherently different to the current NSFAS model”.

If the R600 000 annual household income is used as a cut-off point for eligibility for funding missing middle students, about 65% of university students would have to be funded annually at a cost of R42-billion.

NSFAS is based in Cape Town, but the report proposes that Ikusasa’s new headquarters be in Gauteng.

Government and NSFAS will participate in Ikusasa through loans, grants and subsidies, which will be directed through NSFAS into ManCo. Another entity, FundCo, will own ManCo. FundCo will be tasked with administering funds received from private investors. NSFAS will continue to be the conduit for all government funding.

Professor Ahmed Bawa, chief executive of Universities South Africa, said that, although NSFAS had given hundreds of thousands of students the opportunity to take up undergraduate studies, “it is also true that the experience of students who have accessed NSFAS grants has generally been unsatisfactory and even tortuous”.

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Prega Govender
Prega Govender is the Mail & Guardians education editor. He was a journalist at the Sunday Times for almost 20 years before joining the M&G in May 2016. He has written extensively on education issues pertaining to both the basic and higher education sectors.

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

R350 social relief grant not enough to live on

Nearly half of the population in South Africa — one of the most unequal countries in the world — is considered chronically poor.

More top stories

State to subpoena and fact-check Agrizzi’s ‘illness’ claims

The National Prosecuting Authority will conduct its own probe into Angelo Agrizzi’s claims of ill health, after he failed to attend court again

UK puts army on standby as fuel pumps run dry

Desperate motorists queued up at fuel pumps across Britain, draining tanks, fraying tempers and prompting calls for the government to use emergency powers to give priority access to healthcare and other essential workers

Tigrayans are starving to death

The famine that was feared has come to pass, and aid just isn’t getting in

How to game Twitter’s algorithm – and hoodwink journalists

It is possible to convince newsrooms looking for a topical story that something is news when it isn’t, to dangerous effect
Advertising

press releases

Loading latest Press Releases…
×