Earlier this year, Higher Education Minister Blade Nzimande launched the first phase of the Comprehensive Student Funding model. Under this new model, the minister revealed that students who do meet the eligibility criteria for government-funded bursaries would receive student loans.
The announcement from the Minister was extremely important for thousands of students who are deemed too rich to qualify for National Student Financial Aid Scheme (NSFAS) bursaries but don’t have enough money to absorb the costs associated with obtaining a tertiary education qualification.
Under the Comprehensive Student Funding Model, NSFAS would administer student loans to missing middle students. One of the major benefits of a NSFAS student loan would be that students who achieved a 70% course average would only have to pay half of their loan amount back to NSFAS upon application.
The Organisation Undoing Tax Abuse (OUTA) has labelled NSFAS commitment to fund missing middle students as “failed promises". This comes after it was revealed that only 139 students have been provisionally funded for NSFAS student loans. The minister previously said funding would be available for more than 30,000 students.
NSFAS has said that 12,890 loan applications are awaiting evaluations. These elevations will be conducted by NSFAS to ensure the students meet all the loan eligibility criteria before being funded.
It's important to note that unlike with NSFAS bursary applications, the financial aid scheme cannot use the South African Social Security Agency (Sassa) database to verify if a student is eligible for funding.
By using the Sassa database for NSFAS bursary applications, NSFAS can verify if a student meets the financial eligibility criteria for bursaries. This is done almost instantaneously with thousands of students receiving provisional funding from NSFAS because of this system.
NSFAS revealed that 841 NSFAS loan applications were withdrawn by students while 30 applications are still in progress. They further revealed that 8,345 applications are on the NOT-STARTED. NOT-STARTED applications refer to situations where applicants only created profiles and did not submit applications.
NSFAS has rejected 476 loan applications and only five of the rejected applicants have submitted NSFAS appeals
OUTA points out that an extra R3.8bn would be found in 2024/25 (taking R1.5bn from NSFAS and R2.3bn from the SETAs) to start funding the “missing middle” students. But this is not in the Second Adjustments Appropriation Bill for 2023/24, so such a large move between the SETAs and NSFAS would not be legal.
The NSFAS funding for the next three years is reduced from previously projected.
This makes the minister’s statement look like meaningless electioneering or promises made to draw attention away from the shocking mess in NSFAS.
OUTA also pointed out discrepancies in what the budget review indicates concerning student funding and what the Higher Education department is anticipating.
The Budget Review indicated that Student enrolment growth may be affected by reductions in subsidies to universities and the NSFAS over the MTEF period. However, the Higher Education vote lists NSFAS indicators as increasing from funding 450,000 students in 2024/25 to 559 884 in 2025/26, a 24% increase.
But the vote also says that transfers to NSFAS are being reduced by R16bn over the next three years. Despite the cuts, it says it aims to provide 2.9m students with loans and bursaries over the three years, but that the reductions will affect the number of bursaries it can award.
NSFAS themselves have indicated that fewer students would receive NSFAS bursaries due to budget cuts in the sector.
