The fact that the Minister of Higher Education once again placed the student financial aid scheme NSFAS under administration yesterday underscores the need to thoroughly overhaul the scheme – or even abolish it, according to the Minister of Finance.
The Minister of Higher Education, Mr Buti Manamela, cited poor corporate governance as the reason. Since this relatively small bursary scheme was transformed, overnight and without proper preparation, into a multi-billion rand grant scheme at the end of 2017, matters have never run smoothly.
Former President Jacob Zuma responded to the violent “Fees Must Fall” campaign at the ANC’s national conference in December 2017 by promising free higher education for the poor and the working class. The Department of Higher Education had to scramble to implement this promise.
At that stage, the National Student Financial Aid Scheme (NSFAS) was a bursary scheme awarding loans that were repayable. The total budget in 2017 was approximately R10 billion. Following Zuma’s announcement, it suddenly had to cover tuition fees, accommodation and monthly allowances for a rapidly growing number of students.
NSFAS was not afforded time to prepare for this. It soon became apparent that its information systems and available staff could not cope. Consequently, the institution was placed under administration in 2018 – and remained thus until 2022.
Since then, matters at NSFAS have still not stabilised.
It is against this backdrop that Minister of Finance, Mr Enoch Godongwana, stated in March this year that he is of the view that NSFAS should rather be abolished.
At that stage, three financial technology companies responsible for payments were under discussion. These companies were expected to develop sophisticated systems, similar to ones already used by commercial banks and universities.
NSFAS currently serves approximately 1,2 million students. Its primary function is not always clear as the lines between student financing and some form of social grant are blurred. Many households dependent on students’ allowances, and demand keeps growing every year.
Successful students should eventually find themselves in a financial position that allows them to repay their study debt. The Freedom Front Plus (VF Plus) previously proposed that NSFAS beneficiaries should be captured on the South African Revenue Service’s pay-as-you-earn system. So once they earn an income, they can start repaying their study debt.
NSFAS’s sheer inability to demonstrate sound management since 2018 warrants a thorough reconsideration of the entire scheme. This once again goes to show that corporate problems cannot be solved by throwing money at them.
The Freedom Front Plus joins those calling for this state expenditure to be fundamentally reviewed. The administrative responsibility should be transferred to universities and commercial banks, with the Department of Higher Education merely functioning as a facilitator. While it is very honourable to enable someone to further their studies, there is no such thing as free higher education – someone somehow pays for it and beneficiaries ought to contribute.
