NSFAS consultation with senior university administrators advances clarity on the new Loan Scheme

In a consultative session held on 26 March 2024, registrars, chief financial officers and senior administrators from public universities engaged in a dialogue that sought to provide clarity on the National Student Financial Aid Scheme (NSFAS) Loan Scheme. While the NSFAS representatives were looking for insights and inputs that could be used to strengthen the Loan Scheme policy document, the gathering also fostered a deeper understanding on the facility’s implementation processes while addressing institutional concerns.

Today’s article must be read in conjunction with the above for a more comprehensive understanding on the Loan Scheme.  The edited discussion shared below carries the crux of what transpired in that consultation.

Question 1 — Mandla Cele, University of Fort Hare: What happens when there is more than one dependent from a household qualifying for the Loan Scheme?

Mafilika: If the total earnings of the household remain within the R350 000 to R600,000 bracket, the addition of more than one dependent does not affect eligibility. As long as the total household income does not exceed the specified threshold, applicants remain eligible for funding.

Question 2 – Adele Moodley, Registrar: Rhodes University: Is this an information sharing session or a consultative session?

Mafilika: It is a consultative session. We will distribute the actual policy document once we have received input from all institutions to help strengthen the document. We have an existing framework regarding how the Loan Scheme will be implemented but we have provided room for improvements and inputs.

Question 3 – Luphumlo Fosi, Finance Administrator: Walter Sisulu University: Does one’s “provisionally funded” status have the potential to change if certain processes, such as the signing of surety forms by parents, are not fulfilled? Please provide clarity on our role as institutions in this process.

Mafilika: If a student is provisionally funded, it means that they qualify based on the assessment that has already been done. There are two steps that need to take place before we can confirm funding for the student. Firstly, once NSFAS has received sufficient information to populate and send the pre-agreement form, the student will have to sign this pre-agreement form and acknowledge the conditions stipulated in it. This will allow us to proceed with the next step of obtaining full registration information from the institution. Once we have received this information from the institution, NSFAS will then generate a loan agreement form, and that is what the student will ultimately sign, and that’s where surety will be contained. Only after that step has been completed can we say with certainty that the student has been funded.

Question 4 – Naeem Moolla, Senior Director: Finance, University of Pretoria: Will this loan agreement cover students with historical debt?

Muller: No, the loan will not cover historical debt. This is a new scheme intended to cover new registrations.

Question 5 – Naeem Moolla: What will happen regarding repayment of the loan for a student who exceeds the N+1 rule?

Mafilika: We will assess if that student has completed an undergraduate qualification. We will only fund them if they are planning to undertake a postgraduate qualification. We do consider the N+1 rule as it assists us in determining whether the student is likely to repay the loan.

Question 6 – Dr Nonhlanhla Mabuza, Deputy Director: Student Funding: University of South Africa (UNISA): Have funding decisions been finalised for this scheme? If so, can you provide the list to all institutions?

Mafilika: We will request our operations team to share a list of provisionally accepted students with institutions. This will include those who meet the eligibility criteria and will indicate if any outstanding documentation is required.

Question 7 – Dr Mabuza: I would like to inquire further about the repayment process for distance students who are already employed. When should students proceed with repayment of the loan?

Mafilika: In determining the student’s eligibility, we consider the student’s portion of income as part of their combined household income that should not exceed R600 000. We have no special condition requiring these students to pay back immediately just because they are already employed.

Question 8 – Tasneem Salasa, Director: Student Financial Aid Office, University of Cape Town: Could you please provide more clarity regarding postgraduate students? What level of postgraduate students does NSFAS intend to fund?

Mafilika: The loan scheme intends to cover all-encompassing postgraduate qualifications. We are mindful and have been in conversation with the Department of Higher Education that we need to expand further for postgraduate students. There are concerns around funding for postgraduate research-based qualifications. As part of strengthening the policy document we are expanding provisions for postgraduate funding and the requirements thereof.

Question 9 – Tasneem Salasa: What role do institutions play in this process?

Mafilika: This will be shared when the NSFAS operations team engages with each institution. Students are required to physically sign the agreement and we are going to rely on institutions to devise how to operationalise this. For now, we are consulting on the broad policy but there will be follow-up engagements with institutions.

Question 10 – Glenda Ramathavha, Manager: Financial Aid Office: University of Venda: How was the 70/30 split determined between the STEM (Science, Technology, Engineering and Mathematics) and Humanities qualifications? 

Mafilika: The 70/30 split and associated qualifications were determined by the Department of Higher Education and Training (DHET), which decided how the loan would be applied, based on available funding. The 70/30 split arose because these qualifications offer a greater chance of students being employed, and ultimately, repaying the loan. In making this decision, the DHET had drawn from available institutional data. The NSFAS operations team will be working closely with institutions to outline which qualifications will be eligible, based on the allocation criteria.

Question 11 – Dr Matete Madiba, Deputy Vice-Chancellor: Student Development and Support: University of the Western Cape: Can bursary students also access this funding? How does this scheme operate between the two groups?

Mafilika: The Loan Scheme is exclusively for the missing middle students, those whose total household annual income falls within the R350 000 to R600 000 bracket. If a bursary student has completed their qualification and desires to pursue postgraduate studies, they, regrettably, do not meet the current eligibility criteria. This represents a risk area which will be taken into consideration during the policy’s revision.

Question 12 – Dr Madiba: In terms of timeframes, we have already identified from this consultation that students need to finalise their applications within 30 days. However, I understand that there are still other operational issues to address. Can we anticipate funding this year, or will it be deferred?

Mafilika: We anticipate the implementation of the Loan Scheme in the 2024 academic year, and our operations team will be collaborating with institutions to expedite this process. Various registration details are required from institutions, and the operations team will oversee the facilitation of all necessary information. I believe it’s imperative to schedule a discussion soon, regarding the Loan Scheme timeframes.

Question 13 – Dr Madiba: Could you please provide more detail on NSFAS’s structural capacity to implement this loan scheme? Have you established a dedicated unit, or how are you enhancing capacity?

Mr Che Muller, Senior Finance Manager at NSFAS: From our perspective, our operations team possesses sufficient capacity to manage and implement the Loan Scheme. However, for a comprehensive understanding, I suggest discussing this further in a session that will follow at the institutional level with our operations team.

Question 14 – Sipokazi Matanzima, Chief Officer: Finance, University of the Free State: How will the payment of allowances work? Is this managed by the institutions or the service partners?

Muller: The allowances provided in the Loan Scheme will align with those offered in the bursary scheme and will not differ. We will continue to utilise the same channels for disbursing allowances to students as currently in place.

Question 15 – Rodney Delomoney, Chief Financial Officer: Mangosuthu University of Technology: What happens to the loan if a funded student passes on during their study?

Muller: Our current process will be that we propose that those loans be written off by the accounting authority or the board, but we are still consulting on this with our board and will provide clarity once we have received it.

Question 16 – Professor Bettine Jansen Van Vuuren (UJ): Some postgraduate programmes at universities don’t provide a traditional grading system. How will this impact the conversion of 50% of the loan into a bursary?

Mafilika: There are numerous complexities surrounding postgraduate funding within the current framework of the Loan Scheme. We’re actively seeking input from affected institutions to refine and enhance the policy document, particularly regarding the funding of students pursuing postgraduate qualifications.

Question 17 – Professor Jansen Van Vuuren: I am concerned about the timing of implementing the Loan Scheme, particularly for undergraduate students who are already well into the academic year. Our institutions are at full capacity.

Mafilika: We will escalate this concern to the board so that a possible extension on applications could be considered. Additionally, I advocate for scheduling a meeting with our operations team as many of the questions raised today can best be addressed by them. They possess the expertise to offer clarity in this regard.

The consultative meeting concluded on the note that the NSFAS officials would communicate with institutions on the visitation dates of the NSFAS operations team to campuses. 

Kayley Webster is a Communication Consultant contracted to Universities South Africa.