SA’s national student financial aid scheme has helped millions but is in trouble

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Here’s why.

The board of South Africa’s National Student Financial Aid Scheme has been dissolved by the country’s higher education and training minister, Blade Nzimande, and the organisation placed under administration. Nzimande made the decision because of “ non-payment of allowances”.

Secondly, students must be registered for a funded programme at a public TVET college or university. Continued funding relies on them meeting both NSFAS’s financial criteria and academic standards set by individual institutions. Is NSFAS in a stable condition? The provision of state financial aid to students has been one of the most important and successful higher education policies in post-apartheid South Africa. Significant numbers of students who would otherwise not access higher education have been able to do so.Studies conducted by the Department of Higher Education show that university students funded by NSFAS are less likely to drop out than those who are not.

Most recently, in 2023, NSFAS made several ill-conceived and badly planned administrative changes. One was the introduction of a direct payments solution supported by four fintech companies. Beneficiaries are paid directly by NSFAS and not through institutions and third parties. The change was introduced in the middle of the 2023 academic year, without being piloted and at short notice. It sparked chaos for students and institutions alike.

What immediate steps ought to be taken? NSFAS must focus on building the capacity and systems to support its core mandate. It needs to develop appropriate IT systems and architecture to assess and monitor eligibility. It also needs to provide accurate funding decisions and ensure that qualifying students receive the correct funding at the appropriate time.

The department has a crucial role to play here. It must ensure policy and funding stability in the student funding arena. In recent years funding has been taken from university subsidies to fund NSFAS commitments. This takes critical support away from institutions as only part of NSFAS funding is spent on tuition fees.

 

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