national student financial aid scheme nsfas was established in 1999 as a public entity by an act of...
TRANSCRIPT
NATIONAL STUDENT FINANCIAL AID SCHEME
NSFAS was established in 1999 as a public entity by an act of Parliament to provide for the granting of loans and bursaries to eligible students at public higher education institutions
and for the administration of such loans and bursaries; and to provide for the recovery of loans.
Building a Sustainable Financial Aid Scheme
MAIN FOCUS OF NSFAS
The main focus of NSFAS as contained on the preamble to the NSFAS Act is:
•to redress past discrimination and ensure representivity and equal access;
•to respond to human resource development needs of the nation; and
•to establish an expanded national student financial aid scheme that is affordable and sustainable.
Building a Sustainable Financial Aid Scheme
NSFAS IN A NUTSHELL
2005 Academic Year 2006 Academic Year
(05/06 Budget Year) (06/07 Budget Year)
No of Loans 122,749 125,000
No of Students 107,851 110,000
Average Loan R 11,690 R 12,000
Total Value R 1,260,766,759 R 1,315,224,543
As more funds are received the total Value of loans for 2006 should grow by approximately a further R50 million
Building a Sustainable Financial Aid Scheme
BUDGET SUMMARY
2005 Academic Year 2006 Academic Year
2005/06 2006/07
Department of Education (DE) R 869,092,000 R 926,378,000
NSFAS re-injection of recoveries and interest R 303,452,659 R 332,648,084
Other Funding R 80,050,520 R 81,318,543
Partnerships / Private Sector Funding R 4,075,000 R 6,500,000
Institution R 32,069,239 R 35,000,000
Total R 1,288,739,418 R 1,381,844,627
Loans vs administration R 1,288,739,418 R 1,346,844,627
Loans and bursaries R 1,260,766,759 R 1,315,224,543
Administration R 27,972,659 R 31,620,084
Building a Sustainable Financial Aid Scheme
KEY PARAMETERS
NSFAS maximum award is equivalent to the National Average Full Cost of Study for the first time in 2006
2005/06 2006/07
Maximum Award R 30,000 R 32,500
Minimum Award R 2,000 R 2,000
Interest Rate 5% 6%
RECOVERIES
Building a Sustainable Financial Aid Scheme
R 0.00
R 200,000,000.00
R 400,000,000.00
R 600,000,000.00
R 800,000,000.00
R 1,000,000,000.00
2004/ 05 2005/ 06 2006/ 07 2007/ 08 2008/ 09
Building a Sustainable Financial Aid Scheme
RECOVERIES
Monthly Example
NSFAS continues to implement improved loan recovery strategies resulting in improved collections
Monthly Average % Increase
Feb-04 R 14,416,107
Feb-05 R 18,607,659 29.08
Feb-06 R 22,096,770 18.75
Building a Sustainable Financial Aid Scheme
ALLOCATIONS 2006
INSTITUTION % of Allocation INSTITUTION % of Allocation
CAPE PENINSULA 5.40 PRETORIA 4.48
CAPE TOWN 3.11 RHODES 0.58
CENTRAL 3.10 STELLENBOSCH 0.89
DURBAN 6.44 TSHWANE 11.94
FORT HARE 1.75 UNISA 4.70
FREE STATE 3.15 VAAL 5.09
J OHANNESBURG 8.32 VENDA 2.95
KWAZULU NATAL 7.48 WALTER SISULU 5.83
LIMPOPO 4.72 WESTERN CAPE 3.31
MANGOSUTHU 2.91 WITWATERSRAND 4.06
NELSON MANDELA 3.66 ZULULAND 2.65
NORTH-WEST 3.47 TOTAL 100
Teacher education ring fenced funds of R63 million is allocated according to proposals from HEI’s
Building a Sustainable Financial Aid Scheme
SPENDING HIGHLIGHTS
Just over 98% of NSFAS funds are spent in the form of direct awards to students
The administrative expenditure (just less than 2%) is kept to a bare minimum and consists of:
• Salaries 41%
• IT equipment and services 9%
• Postage and Printing 26%
• Auditors and Actuaries 5%
• Communications and Workshops 5%
• Other Expenses 14%
All procurement is conducted in accordance with Treasury Regulations
Building a Sustainable Financial Aid Scheme
STRATEGIC GOALS
To provide access to higher education for financially needy South Africans who are academically able, in support of the country’s HRD strategy, while making a contribution to the alleviation of poverty. To raise sufficient funding to enable NSFAS to realise its strategic goals and objectives.
To confirm a new allocations formula that is in line with the new higher education transformation framework, for the equitable distribution of funds, in allocating funding in a satisfactory manner. To communicate NSFAS effectively with all its audiences, seeking to make NSFAS the funder of choice.
Building a Sustainable Financial Aid Scheme
STRATEGIC GOALS
To provide effective and efficient Human Resource management and administration ensure that staff are competent to execute and support the NSFAS Strategy; and are managed in accordance with best current practices.
To provide effective and efficient Human Resource management and administration ensure that staff are competent to execute and support the NSFAS Strategy; and are managed in accordance with best current practices..
To implement e-business strategies to enhance collaboration with higher education institutions, thereby increasing the efficiency of the Scheme.
To ensure the effective governance, management and administration of NSFAS.
Building a Sustainable Financial Aid Scheme
BOARDS ROLE IN ADVISING THE MINISTER
One of the functions of NSFAS is to advise the Minister on matters relating to student financial aid [Section 4(f) of the NSFAS Act].
Current areas of investigation in this regard:
• Review of Allocation Formula
• Incentives for Completion of Studies in Minimum Period of Study
• Minimum Criteria to be met for Continued Support from NSFAS
• Targeting of Scarce Skills
Building a Sustainable Financial Aid Scheme
SOME AREAS OF FOCUS
•Increased electronic interface with institutions including the use of electronic Loan Agreement Form
•Envisaged reduction in Age of Majority
•Improved communication with institutions, particularly with VC’s regarding audit findings
•Compliance in respect of a forthcoming new National Credit Act
•Reach out to South African private sector and other funders
•Continued focus on reaching all prospective and deserving students