Presidency on Presidential Task Team on the funding challenges at universities report

17 Dec 2015

On 6 October 2015, I appointed a Presidential Task Team to investigate and make recommendations on short-term student funding challenges at universities.

The Task Team had to report on possible solutions to the immediate funding challenges at universities. The task team also had to look at the implementation of the agreement on the zero per cent fee increment for the 2016 academic year, and the shortfall in National Student Financial Aid Scheme (NSFAS) funding for students registered in the 2013, 2014 and 2015 academic years. In addition, it needed to advise on a short-term plan to mitigate against possible student protests and unrest at the start of the 2016 academic year.

The Task Team undertook its work within the context of a highly politicised and volatile climate on university campuses across the country related to a number of factors, including calls for free university education for the poor and no-fee increases for university students.

The Task Team identified four key factors that could lead to potential protests early in 2016 for which universities need to prepare.

These are:

- Upfront fee or registration payments at the start of the 2016 academic year.

- The NSFAS shortfall - this refers to accumulated student debt accrued by students who qualified for NSFAS loans but were either unfunded or underfunded due to insufficient funds over the period 2013 to 2015, and therefore have accrued university debt.

- Funding challenges experienced by students who do not qualify for NSFAS funding because their income is above the NSFAS threshold, i.e. the so-called "missing middle”.

- Increased demand for academic spaces by new first time entry students and previous financial dropouts in the university system.

The Committee made a number of short-term recommendations to address financial challenges, as well as a range of short to medium term recommendations to address other issues discussed in the report.

The short-term recommendations on funding include:

- A short-term solution for the 0% fee increment. R2.3 billion will be made available to address this shortfall. Government and the universities will make contributions towards addressing the shortfall.

- Upfront fee and registration payments should be implemented across the system for those who can afford to pay. Students who meet the NSFAS means test should not be required to pay upfront payments.

 The NSFAS shortfall has been quantified at R4.582 billion. The report recommends that R2.543 billion of this amount must be made available from the fiscus, in the form of loans to provide short-term debt relief to 71 753 students who were funded inadequately or were unable to access financial aid over the 2013 to 2015 academic years. The further R2.039 billion is required in the 2016/17 financial year to ensure that currently unfunded continuing students receive NSFAS support in the 2016 academic year.

This amount will also be made available through reprioritisation from the fiscus. Additional recommendations include:

- NSFAS should improve its administrative systems and engage with universities and students to ensure that the rules of the Scheme are clearly understood.

- Rules pertaining to academic eligibility of students for NSFAS should be applied consistently. Continuing students who meet the NSFAS academic criteria and the university's criteria for proceeding, should continue to be funded for their whole qualification.

- Universities should review and improve the efficiency and effectiveness of their communication system with students on all issues including NSFAS matters.

- A process must be put in place immediately to develop a new financing model, which includes the private banking sector and other business interests, to incorporate options for funding the "missing middle” that provides loans at favourable interest rates without having to provide surety. This must be developed during 2016 with the view to testing it in the 2017 academic year for full implementation in 2018. Investment should be solicited from the full range of stakeholders to enable implementation on the scale required.

Additional prospective students seeking spaces at universities, and who did not apply in time during 2015 must be directed to the Central Applications Clearing House (CACH), an integrated service providing career advice and development services and referrals to post-school education and training opportunities. The CACH can be accessed through the call centre on 0800 356 635, by sending an SMS to 49200 (SMS name and ID), or via the website: http://cach.dhet.gov.za.

While the right to protest in a democracy is protected and supported, all students, student leaders and formations should disavow anarchy and the destruction of university and private property.

I would like to extend my appreciation to the Task Team for the intensive work they undertook in less than two months. I believe that the recommendations will assist all of us as we pursue our mission to ensure that no poor, academically deserving student is denied access to higher education and training, and that affordable higher education for all is achieved, while ensuring sustainable quality public higher education provisioning for our country.

I will soon announce the members of the commission that will look at among others, the introduction of free higher education to improve access for the children of the poor and the working class.

Work has been ongoing to finalise the terms of reference for this commission.

Issued by Bongani Majola, Acting spokesperson to the President, 17 December 2015