Portfolio Committee on Education

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PRESENTATION TO
Portfolio Committee on Education National
Assembly ----------------------- 25 March
2008 ----------------------- By Mr. Pragasen
Naicker NSFAS CEO
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NATIONAL STUDENT FINANCIAL AID SCHEME
NSFAS was established in 1999 as a public
entity,under the Ministry of Education,by an
act of Parliament (Act 56 of 1999)to provide for
the granting of loans and bursariesto eligible
students at public higher education
institutionsand for the administration of such
loans and bursaries and to provide for the
recovery of loans. The NSFAS Act has since been
amended to include further education and
training (FET) colleges.
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• The main focus of NSFAS as contained in the
  preamble to the NSFAS Act is
• to redress past discrimination and ensure
  representivity and equal access
• to respond to the human resource development
  needs of the nation and
• to establish an expanded national student
  financial aid scheme that is affordable and
  sustainable.

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Goal 1 To provide access to public higher and
further education for marginalised South African
citizens who are academically able, in support of
the countrys HRD strategy, while making a
contribution to the alleviation of
poverty. Goal 2 To raise sufficient funding to
enable NSFAS to realise its strategic goals.
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Goal 3 To develop a new allocations formula in
line with higher education needs and
transformation imperatives, for the equitable
distribution of funds through allocating funding
in an optimum manner. Goal 4 To communicate
NSFAS effectively to all its audiences, seeking
to make NSFAS a funding channel of choice. Goal
5 To ensure the effective governance,
management and administration of NSFAS.
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Goal 6 To provide effective and efficient Human
Resource management and administration to ensure
staff are competent to execute and support the
NSFAS Strategy, and are managed in accordance
with best current practices. GOAL 7 To
implement e-business strategies to enhance
collaboration with higher education institutions,
thereby increasing the efficiency of the Scheme.
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EXPENDITURE SUMMARY
Building a Sustainable Financial Aid Scheme
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CORE ALLOCATIONS 2008 (DE DE (Teacher))
Eastern Cape R 181.5 m 12 Free State R
92.5 m 6 Gauteng R 600.0 m 39 KwaZulu
Natal R 301.0 m 20 Limpopo R 110.0 m
7 Mpumalanga R 0.0 m 0 Northern Cape R
0.0 m 0 North West R 54.0 m
4 Western Cape R 194.0 m 13 Total R 1 532
m
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Core Award Scheme

• Interest rate to be linked to Repo Rate as
  determined by the South African Reserve Bank and
  pegged at 80 of Repo.

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EXPANDING THE SCHEME
Bursaries available from 2007 2007
2008 2009 Funza Lushaka
R120m R180m R400m(Teachers) FET
colleges R100m R200m R300m Social Work R
50m R105m R210m
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EXPANDING THE SCHEME Public FET Colleges

• The National Certificate (Vocational) is a new
  qualification at level 2, 3 and 4 of the NQF. The
  programmes include
• Civil Engineering and Building Construction
• Electrical Infrastructure Construction
• Engineering and Related Design
• Finance, Economics and Accounting
• Hospitality
• Information Technology and Computer Science
• Management
• Marketing
• Office Administration
• Primary Agriculture
• Tourism

These new programmes are intended to directly
respond to the priority skills demands of the
South African economy.
Building a Sustainable Financial Aid Scheme
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FET R100 million allocated in 2007
Eastern Cape R 15.5m 16 Free State R 7.5m
8 Gauteng R 18.5m 19 KwaZulu Natal R
18.5m 19 Limpopo R 15.0m 15 Mpumalanga R
7.0m 7 Northern Cape R 3.0m 3 North
West R 5.5m 6 Western Cape R
9.5m 10 Total R100 m
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EXPANDING THE SCHEME Public FET College
Bursaries

• 50 public FET colleges located in the 9 provinces
• To date, of the R100m available for 2007
• R67 million has been paid to FET colleges
• To assist 12,400 students (average bursary
  R5,400)

Building a Sustainable Financial Aid Scheme
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Final processing for 2007/08 year still in
progress
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RECOVERIES
Building a Sustainable Financial Aid Scheme
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REINJECTION OF RECOVERED MONEY
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Year on year comparison
NSFAS continues to implement improved loan
recovery strategies resulting in improved
collections
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• 2007/08 R39 million
• (Total loans and bursaries R1.8 billion)
• 2008/09 R48 million
• (Total loans and bursaries R2.1 billion)
• Currently, the NSFAS cost ratio is slightly less
  than 2 of the total amount of funds it
  administers. In national and global terms this is
  regarded as a low cost operation.
• The operational costs of Financial Aid offices at
  each university is the responsibility of the
  institution.

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AREAS OF FOCUS for 2008

• Improve operational efficiency and systems at
  NSFAS to manage any increase in donor funding.
• Business Process Reengineering (started Feb 08)
• Further integration of Financial Information
  Systems (started Feb 08)
• NSFAS Web based Services (Pilot starts in June
  08)
• Electronic Application and Means Test Form
• Application for exemption from National Credit Act

Building a Sustainable Financial Aid Scheme
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AREAS OF FOCUS for 2008

• Communications and Development including
  fundraising
• Current NGO partnerships
• Eastern Cape 10 Mpumalanga 1
• Free State 0 Northern Cape 0
• Gauteng 1 North West 0
• KwaZulu Natal 5 Western Cape 2
• Limpopo 4
• Focus on under serviced areas particularly rural
  areas
• Participation in university open days and country
  wide career exhibitions remains important
• NSFAS will seek to actively increase its
  partnerships with Corporate SA

Building a Sustainable Financial Aid Scheme
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Primary Aim for 2008

• Given the importance of the NSFAS mandate in
  respect of South Africas national development
  goals, the organisation must be able to
  administer substantial increases in funding when
  the need arises. In 2008, NSFAS will make
  fundamental changes and improvements to its
  systems, processes and staffing capabilities so
  that it can administer increased funding
  speedily, efficiently and with the required level
  of auditing controls.
• NSFAS will report to the next Portfolio Committee
  meeting on the outcome of the project referred to
  above.

Building a Sustainable Financial Aid Scheme