The DA's alternative NSFAS funding model

31 August 2023

Today, the DA revealed our alternative student funding model to solve the myriad of problems with the National Student Financial Aid Scheme (NSFAS) and provided an update on the Private Protector’s investigation of NSFAS direct payment contracts.

The current higher education funding model is highly unsustainable considering declining levels of economic growth, the shrinking tax base, poor fiscal management, and corruption.

The problems are exacerbated by the centralised NSFAS operations model and ICT interface differences between institutions and the scheme, which affect payment and result in students being unable to register on time for the new academic year and failing to secure accommodation.

The DA will reform NSFAS and create a sustainable funding environment

Please find attached the DA's Draft Position Paper on NSFAS.

The DA alternative funding model will be a tiered system for loans and grants, with a primary focus on providing substantial financial support to students hailing from low-income households.

This differentiated loan scheme will be based on income bands which will be regularly evaluated and updated and would give students access to a variety of government loans with favourable repayment conditions. Loans would be converted to bursaries based on academic performance to incentivise a better throughput rate at institutions.

This system provides a funding solution for the “missing middle” who can afford to pay a portion of their expenses without excluding poorer students.

With more funds thus available, budgets for accommodation allowances could be broadened and the blanket accommodation cap scrapped in lieu of individualised accommodation funding.

The DA will also conduct an updated national survey on the state of higher education in South Africa, which will include an investigation into the projected demand for student accommodation to guide the policy approach and ensure quality and affordable student accommodation.

The Public Protector’s investigation of the NSFAS direct payment scheme

The Public Protector advised that their investigation is focused on the possible transgression of tender processes and policies, with a secondary focus on the four companies that won the contracts – Coinvest Africa, Tenet Technology, Ezaga Holdings and Norraco Corporation – and their directors. The Public Protector has also undertaken to report any irregularities in this regard to financial authorities.

The bid evaluation committee (BEC) will have to account on every part of the process, including NSFAS CEO Andile Nongogo’s presence and participation at the bid presentations. Should it be deemed necessary, Minister Blade Nzimande will also be questioned.

Issued by Chantel King, DA Shadow Minister of Higher Education, 31 August 2023