1 NSFAS SUBMISSION TO THE PRESIDENTIAL COMISSION ON FEES – 24 AUGUST 2016 1
2 • TERMS OF REFERENCE 1 • INTRODUCTION OF NSFAS 2 Key 3 • DEFINING KEY CONCEPTS discussion • SOME OF THE SOUTH AFRICAN 4 CHARACTERISTICS points 5 • OTHER GLOBAL AND LOCAL PERSPECTIVES • POINTS THE COMISSION SHOULD CONSIDER 6
3 PRESIDENTIAL COMMISSION ON FEES: TERMS OF REFERENCE No. TERMS OF REFERENCE 1. The feasibility of making higher education and training fee-free in South Africa, having regard to: 1.1. The Constitution of South Africa, all relevant higher and basic education legislation, all findings and recommendations of the various Presidential and Ministerial Task Teams, as well as all the relevant educational policies, reports and guidelines; 1.2. The multiple facets of financial sustainability, analysing and assessing the role of government together with its agencies, students, institutions, business sector and employers in funding higher education and training; and 1.3. The institutional independence and autonomy which should occur vis a vis the financial funding model
4 PRESIDENTIAL COMMISSION ON FEE FREE : INTRODUCING NSFAS Public entity, funded and governed by the Department of Higher WHAT IS NSFAS? Education and Training. Established by the NSFAS Act 56 of 1999 to disburse financial aid to students at universities and TVET colleges Funded over 1,5m students over 25 years, from 7240 in 1991 to 409 NSFAS’ IMPACT OVER 475 in 2016. Approximately 25% of university students are funded by TIME NSFAS, and 33% of the TVET students. Tuition fees still remain high. NSFAS’ impact “diluted” by the increasing fees – despite increase in allocation. #FEESMUSTFALL? NSFAS funding allocation increase by inflation vs. fee increase that are above inflation (CPI). PTT established in 2015 to assess extent of student debt. 71 753 students with debt, were identified. PRESIDENTIAL TASK R2,5bn – for historic debt (2013-15 academic year); and TEAM R,0bn – for continuing students (2016 academic year) 4
5 PRESIDENTIAL COMMISSION ON FEES: DEFINING KEY CONCEPTS No. DESCRIPTION DEFINITION NSFAS CURRENT ROLE 1. Funding for first First undergraduate degree or NSFAS currently fund first study for opportunity diploma and postgrads limited to qualification, along with the B-Tech access that required for professional programme that lead to a professional registration and employment in registration a professional field Tuition fees, accommodation 2. Funding the NSFAS funds students for tuition, fees, meals, learning support “right” amount/fee books, accommodation and other materials costs, and allowances allowances for students with disabilities.
6 PRESIDENTIAL COMMISSION ON FEES: DEFINING KEY CONCEPTS No. DESCRIPTIO DEFINITION NSFAS CURRENT ROLE N Applicants with appropriate mix of 3. Who should NSFAS utilises a means test for academic excellence and receive? targeted assistance and to determine financial need. how much each receives. All education must be paid for – 4. What does The NSFAS funding is currently free to by someone, through some “free” mean? students, during their course of study. means. Students are only required to repay the loans once they commence with employment. Loans up to 40% are converted into a bursary. Almost 70% of NSFAS funding is bursaries “free”.
7 PRESIDENTIAL COMMISSION ON FEES: CURRENT CHALLENGES AND OPPORTUNITIES IN THE HIGHER EDUCATION SECTOR No. COMPONENT CHALLENGES 1. Public Institutions of Top-slicing prevailed as a distributive mechanism to fund more Higher Learning students (but with smaller loans or bursaries, leaving debt) As enrolment increases to address participation rate targets, number of students that require funding has increased 2. Funding: Economics Increasing tuition fees as a result of a decline in state funding High tertiary inflation – weakened economy pushing costs of academics, books, equipment and municipal services Higher education less affordable for all households
8 PRESIDENTIAL COMMISSION ON FEES: CURRENT CHALLENGES AND OPPORTUNITIES IN THE HIGHER EDUCATION SECTOR No. COMPONENT OPPORTUNITES • 3. Technology: Opportunities to develop a single portal for applications for Efficiencies assistance and for validating and verifying data, (Central Application System) • Opening Learning education
9 PRESIDENTIAL COMMISSION ON FEES: GLOBAL PERSPECTIVES AND LOCAL IMPERATIVES International conventions recognise basic The NSFAS Act (1999) provided for education as a fundamental right but not further the realisation of the right to further education. Higher education equally accessible education, through making it for all on the basis of merit, based on available progressively available to those capacity and through appropriate means – who meet the criteria for being from deliberate, concrete and targeted measures poor households – i.e. accessible to everyone within available resources 2 The Constitution of South Africa and the Bill of Rights Section 29 (1) “right to … further education – which the state must make progressively available and accessible ” Implicit in this is the need to ensure that this 1 provision meets inherent quality standards 9 Long-tem commitment by the State so cannot be reversed
P R E S I D E N T I A L C O M M I S S I O N O N 10 F E E S : U N I Q U E L Y S O U T H A F R I C A N C H A R A C T E R I S T I C S Overall lower than High levels of youth Persisting and desired participation rate unemployment (over growing inequality as in higher education, 25%), significant highly unequal (for high measured by the Gini 1 2 3 numbers of NEETs co-efficient (0.69) growth should be >50%) Increasing pressure High levels of skills Distribution of good (Green Paper PSET) to shortages, not quality schools is expand seats in post- sufficiently uneven and insufficient school education for a responsive supply- 4 5 6 in South Africa • wider set of NEETs side High tuition costs for Decline in real Most diverse and higher education relative to economic growth and differentiated higher income. F or the “have - in the State education system in nots”, higher education is a contribution to higher 8 8 Africa. Excellent 7 means to get out of education postgrad reputation poverty
11 PRESIDENTIAL COMMISSION ON FEES: POINTS THE COMISSION SHOULD CONSIDER Costing and Financing Policy Considerations Fee structuring Sustainability Through Loan Funders need to broaden The model for fees Firmer, more consistent Recoveries: lessen the their scope to consider application of rules across all could be differentiated “hidden grant ” institutions – bring equity the individual student in based on different types terms of the financial through the student-centred component by adopting and categories of students: needs of their family – model. Updating of means tuition fee caps, tuition fee an effective cost different packages of testing. increase caps, FCS caps etc. recovery model and support. Back loading – grant in Yr1, using different loan thereafter; Re-direct funds from deferred payments other government streams. (free-now-pay-later, free-now- work-later, free-now-work- longer, free-now-pay-gradtax)
12 Thank you
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