Loans pro­posed as way to fund higher ed­u­ca­tion

Weekend Argus (Sunday Edition) - - NEWS - TSHEGO LEPULE

A PRO­POSAL to re­place the Na­tional Stu­dent Fi­nan­cial Aid Scheme (NSFAS) has been met with mixed emo­tions as the coun­try waits on Pres­i­dent Ja­cob Zuma to make the fi­nal pro­nounce­ment on ways to make free ed­u­ca­tion a re­al­ity.

This fol­lows the re­lease of the re­port of the com­mis­sion headed by Judge Jonathan He­her on the fea­si­bil­ity of free higher ed­u­ca­tion ear­lier this week.

The re­port made sev­eral rec­om­men­da­tions, but in essence stated that the gov­ern­ment can­not af­ford to pro­vide free ed­u­ca­tion for all.

The one rec­om­men­da­tion that has struck a nerve is that of re­plac­ing the NSFAS with an in­come contin­gency loan sys­tem which would al­low the bank­ing sec­tor to pro­vide stu­dent loans which are guar­an­teed by the gov­ern­ment.

In terms of the pro­posed sys­tem, stu­dents will ap­ply for bank loans and will have to pay them back once they start earn­ing a cer­tain amount of money.

The pro­posal has been frowned upon by some and re­ferred to as a sys­tem that will en­slave poorer stu­dents to debts.

Economist Dawie Roodt said the pro­posed sys­tem could be a bet­ter way to go as banks had a loan-re­cov­ery mech­a­nism that is far su­pe­rior to that of the NSAFAS.

“It will be quite beneficial for the banks, they will make money out of this whole process and they will not lose money be­cause there is a guar­an­tee be­hind it. I think it will be good for the banks, we will get rid of the ad­min­is­tra­tion that is NSFAS, which has not been ef­fec­tive or ef­fi­cient. The only loser will be the tax­payer who will stand in for loans,” he said.

NSFAS chief ex­ec­u­tive of­fi­cer Steven Zwane said they would wait for Zuma to make the fi­nal de­ci­sion on the way for­ward af­ter re­ceiv­ing rec­om­men­da­tions from the in­ter­min­is­te­rial com­mit­tee to looked into the fund­ing model for higher ed­u­ca­tion.

The NSFAS re­ceived 150 000 ap­pli­ca­tions for fund­ing al­ready and is ex­pect­ing 100 000 more.

Nkosazana Dlamini Zuma

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