Minister Pandor allocates R967 million to settle the historic debt of continuing NSFAS funded students
The Minister of Higher Education and Training, Naledi Pandor, is pleased to announce that the Department of Higher Education and Training (DHET) has allocated an additional sum of R967 million to the National Student Financial Aid Scheme (NSFAS). This is specifically in order to settle the historic debt owed to universities by 52 514 NSFAS funded continuing students.
Minister Pandor said the issue of the historic debt owed to universities by these students, has been of concern and raised by stakeholders for some time. “This is a significant contribution. It will alleviate some of the debt owed to universities by students. It confirms that government is sensitive to the plight of students from poor and working-class families,” added Minister Pandor. The allocation is specifically for those students who had been funded on the previous funding scheme of the NSFAS. In other words, it applies to those who were students prior to the significantly improved funding support that began in 2018. Historically, these prior students were required to fund part of their costs through family or own funding and were unable to do so, hence the accrual of debt.
Minister Pandor indicated that this is the first phase of the assessment of the historical debt owed to universities. Work on the due diligence exercise begun by the Minister of Higher Education and Training, in consultation with the Minister of Finance and Minister of Planning, Monitoring and Evaluation continues. “We have now concluded, the first phase of the due diligence. We found that 52 514 NSFAS qualifying students, who were registered for the 2018 academic year, owed universities R967 million,” Minister Pandor said. “Historic debt refers to money owed to the university by continuing NSFAS qualifying senior students. The relief applies to those who were registered in the 2018 academic year and were funded by NSFAS on a family income threshold of R122 000 per annum. These were students who met the academic criteria to enable them to graduate within the minimum allotted time plus two years.”
The funding provided by NSFAS for these students, was subject to a funding cap and often included the expectation of a family contribution. As a result, the amount of funding provided by NSFAS was sometimes insufficient to cover the total actual fees and cost of study debt, particularly at universities and in programmes with high fees. This resulted in students accruing debt with their institution, despite being funded by NSFAS. The Minister said, “We are aware that there will be some students who entered the university system prior to the new scheme being implemented in 2018, who will continue to be funded through NSFAS on the pre-2018 funding model. These students would have accrued further debt during their 2018 academic year if their fees were above the NSFAS cap”. In order to address this, Minister Pandor said, her department plans to provide funding to NSFAS during the 2019 academic year to clear this debt. It is expected that all the students funded through the old scheme based on the R122 000 threshold, would have exited the system by the 2022 academic year.
The Minister also appealed to stakeholders in broader society, particularly those in the private sector, to work with Government and institutions in finding solutions to support students from families that cannot afford to pay university study costs. She stressed that the DHET will work with all stakeholders to find ways to relieve the debt burden of these students. The aim is to assist government in developing a comprehensive student funding solution to assist ‘missing middle’ students in order to fund their university studies.