Report shows jaundiced view of the NSFAS

THE MINISTER of Higher Education and Training released, in mid-December, the report of a ministerial task team set up to investigate student funding for those who couldn’t afford higher education.

Its main recommendations provide a realistic framework for rethinking approaches to funding. These include grants for very poor students and a combination of grants (progressively reduced as household income increases) and loans for the poor and “missing middle” – students whose parental income is above the cut-off point to qualify for loans from the National Student Financial Aid Scheme (NSFAS) but insufficient to meet the full costs of higher education.

The report recommends the mobilisation of private-sector funds through tax incentives.

But there’s one key flaw in the report: It recommends that a new agency, the Ikusasa Student Financial Aid Programme, be established to replace the NSFAS. It was established in 1999 to ensure that funding was not a barrier to access to higher education for poor students. It has successfully discharged this mandate and supported more than a million students in the past 18 years.

The report presents a jaundiced view of an important organisation.

One of the recommendations is that Ikusasa should establish a special purpose vehicle run by the private sector to manage student funding on the government’s behalf.

It argues that this is necessary to counter the private sector’s apparent lack of confidence in the NSFAS, which is ascribed to the scheme having weak accountability structures and inefficient processes, especially its poor loan recovery record. The NSFAS has, as a result, apparently lost “most of the funding it used to receive from the private sector”.

There has been no private-sector funding of the NSFAS other than its administration of bursaries on behalf of one of the major banks.

The NSFAS was also successful in recovering loans between 1997 and 2008, increasing from R30 million to R636m. After that the amount decreased: only R248m was recovered in 2014, as against projections of R1.711bn. This was because of the promulgation of the National Credit Act in 2005.

The report proposes that funding should prioritise professional and vocational programmes in scarce skills and high demand occupations to “grow the economy”. This refers to the need to grow enrolments in science, engineering and technology.

The scarce skills focus would adversely impact on poor students. They are the main recipients of low quality schooling, especially in subjects like maths and science which are essential for access to the programmes.

The report also proposes that Ikusasa develop a “wrap-around” student support programme. Social, life skills and academic support to improve throughput and graduation rates would be provided using external service providers. The fact that such support has been successfully provided on a small scale does not necessarily mean it can be taken to scale.

What is needed is systemic intervention to address the knowledge and skills gap between school and university.

The report’s uncritical focus on enhancing the role of the private sector ignores the fact that the private sector is risk averse. In the absence of collateral in the form of government guarantees, it’s unlikely to come to the party.

The private sector has a role to play. But this can best be done through an expanded NSFAS, with a separate sub-structure to deal with private sector contributions and investments.

The NSFAS cannot be wished away by the whims of a task team which seems to have little understanding of the social and political context. – The Conversation

Ahmed Essop is Research Associate in Higher Education Policy and Planning, Ali Mazrui Centre for Higher Education Studies, University of Johannesburg