This year at least half of the students in the country’s estimated 68,500 “missing middle” category of students will be funded by government thanks to a new “comprehensive student funding model” announced on Sunday by higher education minister Blade Nzimande.
The missing middle is defined as students who don’t come from completely impoverished homes and therefore don’t qualify for funding because their household income is above the R350,000 per annum threshold, but for whom tertiary education remains unaffordable because their annual household income is less than R600,000.
Nzimande said his new model, a work-in-progress for several years and now ready for implementation, will introduce measures to support all categories of students, including those not supported by the National Financial Aid Scheme (NSFAS).
The new loan scheme will be administered by NSFAS in line with the NSFAS Act. He said NSFAS had, between 2019 and 2022, disbursed R123bn to almost 3-million beneficiaries.
He said the scheme, though not fully complete and in need of some improvements, would be launched this month and would be phased in over a decade.
“When we make further announcements after the official release of matric results (on Friday), NSFAS will provide details on the full implementation plan of this loan scheme,” he said, explaining why full details of the scheme’s workings could not yet be made known.
Nzimande said his ministerial task team had reviewed several solutions to missing middle funding and had looked at the loan and bursary options already available “within the student funding landscape”. This had led to a range of proposed emerging funding solutions for the short and medium term.
The first two phases were first to support immediate recommendations for the 2024 budget process to support this year’s intake, then the implementation of medium-to-long-term solutions for the future. He said the final report on this plan was presented to cabinet on June 22 last year and had been approved.
This comprehensive and universal financial aid solution will resolve the ongoing challenges that affect post-school institutions every year.
— Higher education minister
Blade Nzimande
“This comprehensive and universal financial aid solution will resolve the ongoing challenges that affect post-school institutions every year ... and has produced 18 recommendations and explored three high-level policy models, supported by financial models, to guide the decision-making on the final recommendations.”
Nzimande said that after receiving government approval, his department had consulted with several other parties, including student and labour organisations, Universities South Africa (USAf), the Banking Association of South Africa (BASA), the BBBEE Commission, the Public Investment Corporation and the National Treasury. Further consultations were also held with the department of trade and industry, Cosatu, Sadtu, the department of cooperative governance and traditional affairs (Cogta), the University Chancellors’ Forum and the SA Human Rights Commission.
Nzimande said research indicated that 161,292 students in the public university system had received bursaries from sources other than NSFAS, indicating that a closer collaboration between government and the private sector was needed to maximise funding options for students.
He said a capitalisation fund of R3.8bn had been secured to kick off the new model, with R1.5bn coming from the National Skills Fund and R2.3bn from Sector Education and Training Authorities (SETAs). This would be enough to fund 47% of the missing middle students — or 31,884 of the estimated 68,446 total.
Phase two would involve increasing government’s seed funding contribution to “R31.6bn to R42.1bn over 10 years”.
The criteria for students wanting to apply for a study loan are:
- students whose annual household income is between R350,000-R600,000;
- TVET and public university students;
- undergraduate or postgraduate students;
- 70% of the applicants will be taken from STEM programmes (science, technology, engineering and mathematics);
- student applicants must sign a loan agreement.
Students needing loans for ongoing studies must attain an average of 60% or higher; their loan will cover tuition, learning material and accommodation, and those who complete their qualification in the prescribed time and obtain an average of 70% or higher will have 50% of their loan converted to a bursary on request.
Dr Nkosinathi Sishi, director-general of the department of higher education and training, described the announcement of the new scheme as “an historic moment”.
“This phased model is not perfect, and work still needs to be done on it, but it is the start of better opportunities for the underdog,” he said.
The Organisation Undoing Tax Abuse, which has had several run-ins with Nzimande over the huge corruption findings and mismanagement at NSFAS, were not available to comment on the briefing. Last week the minister denied their allegations against him, stating he had never used student money to fund the Communist Party, nor had he taken any kickbacks.
Sadtu spokesperson Nomusa Cembi said she could only comment on the announcement after being briefed by political heads on Sadtu’s upcoming involvement in the plan.
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