The National Student Financial Aid Scheme (NSFAS) will administer the new funding loan scheme with banks assisting to provide backup support and other services, Parliament was told.
Discussions with the banks have started, they have signed non- disclosure agreements and Section 70 (PFMA) discussions with National Treasury were being prepared.
This, as the implementation of the first phase of the funding model is under way with 22 245 loan applications received as of February 12. About 139 students have already been provisionally funded, 12 890 were awaiting evaluations.
According to Higher Education deputy director-general for universities Dr Marcia Socikwa, discussions with partner universities was also ongoing.
The Department of Higher Education and Training (DHET) briefed the Portfolio Committee on Higher Education this week over the comprehensive student funding model for post-school education and training.
A total of R3.8 billion has been set aside for this loan that will support “missing middle” students.
“This is a phased approach – in the short term, which is 2024/2025, we have managed to secure what we call a credit enhancement comprising R1.5bn from the National Skills Fund (NSF) and R2.3bn from SETAs. This will look after about 47% of ‘missing-middle’ students which is roughly 31 814 students over a four-year period.
“In the medium term, 2025/27, NSF has already contributed R1.5bn for 2025 and we will be engaging the Department of Trade, Industry and Competition more vigorously to access the skills funds possibly through the BBBEE Code and goodwill funds, and of course repayments from employed students.
“This is required for the sustainability of the loan scheme; in essence, this is an income contingent loan,” said Socikwa.
A steering committee that will provide advisory services to NSFAS has been established. It will include executives from Stellenbosch University, UCT, NSFAS and a representative of DHET and NSF.
Higher education director-general Nkosinathi Sishi said the department will draw on existing capacities in the universities to work with NSFAS and oversee the steady growth of capacity in the loan unit to service the scheme.
DA MP Chantel King said an alternative IT system should also be considered to ensure all funding modes are on one platform.
“I am also enlightened to see the model is also looking at income contingent loans. This is something we have been saying.
“When we are considering the loan scheme that is being brought in, my concern is that we are running two parallel systems and one will ultimately collapse. I am also worried about the involvement of banks, looking at what happened with the direct payment and the headaches it came with.”
Meanwhile, National Institute for the Humanities and Social Sciences (NIHSS) executive manager Auriel Niemack said there were challenges of sustained funding.
“This remains an ongoing challenge for the institute, despite the successes and contributions towards the humanities and social sciences landscape. Since 2015/16 and 2022/23 there has been funding for postgraduates and research projects. However, we have no funding in this current financial year,” said Niemack.
Committee chairperson Nompendulo Mkhatshwa said they were concerned about funding that NIHSS was still awaiting to be allocated to them and urged that this be given priority.
She also requested that DHET respond in writing to other issues.
Cape Times