DA proposes decentralised NSFAS model that provides tiered system for loans and grants

Students march to the National Student Financial Aid Scheme's head office in Cape Town on 24 May 2023, accusing the scheme of ignoring their plight and criticising its new payment methods. (Photo: Gallo Images / Brenton Geach)

By Msindisi Fengu

1 Sep 2023

The DA’s model for higher education funding offers loans for the full cost of study for students from families earning less than R180,000 and proposes that the scheme be decentralised to universities.

The DA has proposed a similar alternative student funding model to recommendations made by retired judge Jonathan Heher following the #FeesMustFall protests.

According to the party’s proposal, which was announced at a media briefing in Parliament on Thursday, 31 August 2023, funding would be provided through loans and scholarships for those who qualify.

The DA proposes the implementation of a tiered system for loans and grants with a primary focus on providing substantial financial support to students from low-income households.

Under the DA’s funding model, students will have access to a variety of government loans, which qualifying students will repay at a later stage.

Read more in Daily Maverick: NSFAS to investigate complaints after students vent frustration over new direct banking system

Loans will also be combined to include scholarships as an option. These will be awarded to outstanding students and are non-repayable. Converting loans into bursaries will be considered based on the academic performance of the student.

The DA plans to collaborate with the private sector to enhance access to student funding from bank loans and sponsored scholarships.

Heher recommendations

In 2017, the Heher Commission recommended that NSFAS be scrapped at universities and be replaced with a cost-sharing model of government-guaranteed income-contingency loans (ICL) from commercial banks or a similar model that was proposed by the Ministerial Task Team on Funding for Poor, Working Class and Missing Middle Students.

It was only at technical vocational education and training colleges that NSFAS could be retained to administer student fees, said Heher.

Read more in Daily Maverick: Zuma releases Fees Commission report

But former president Jacob Zuma took a different approach and announced that the government would subsidise free education for the poor and working class with a combined annual household income of R350,000.

Prior to his decision, NSFAS was accessible to students coming from households with annual incomes up to R120,000 in the form of a loan.

Under the new system, students from families earning up to R600,000 – including the “missing middle” – were funded through bursaries.

DA funding criteria

In a banded system, the DA’s proposal stated it would offer loans for:

Full cost of study for those with annual household income up to R180,000;

66% cost of study for students from households with an income of R180,000 to R350,000; and

33% cost of study for students from households earning R350,000 to R600,000.

“This way, we will ensure that loans cover the full cost of study of some eligible students rather than a portion of the costs for a larger group,” the party’s proposal read.

DA NSFAS Students march to the National Student Financial Aid Scheme's head office in Cape Town on 24 May 2023, accusing the scheme of ignoring their plight and criticising its new payment methods. (Photo: Gallo Images / Brenton Geach)

This entailed providing proportional assistance to those in the “missing middle” who could afford to pay a portion of their expenses.

“We will ensure all applicants from households with an annual income of up to R600,000 have a fair chance to apply for financial aid,” the proposal read.

The current executive’s plan to fix what is wrong with NSFAS is not tangible. We’ve not seen how it is improving.

The proposal also stated that the administrative functions of NSFAS would be decentralised to institutions. This would prevent administrative backlogs and prevent funding delays.

The proposal stated that prices for private student accommodation providers should not be regulated but be market-related.

Read more in Daily Maverick: NSFAS — the state bursary scheme at the root of SA students’ outcry in 2023

Responding to Daily Maverick during the briefing, DA head of policy Mat Cuthbert said this was a policy to be instituted if the DA came into government.

“We’re not going to submit it anywhere; rather this is the policy platform related to this particular issue that we will stand on in the run-up to the elections,” Cuthbert said.

DA MP Chantal King said they will push for this policy position to ensure that NSFAS has a sustainable funding model for students.

King said fee-free education is a ticking time bomb and this has been their position since 2019.

‘Somebody needs a tangible solution’

DA MP Karabo Khakhau said the current NSFAS system is failing.

NSFAS’s budget was significantly increased after Zuma’s administration expanded the eligibility criteria for funding, but students are still struggling to access the funds they qualify for and complain that they are not receiving their stipends and struggle to access accommodation.

Read more in Daily Maverick: ‘Uncertainty, anxiety and frustration’ — NSFAS students cry foul over new banking system

“The current executive’s plan to fix what is wrong with NSFAS is not tangible. We’ve not seen how it is improving,” Khakhau said.

She said students were still stranded.

“Somebody needs to give a tangible solution of how to fix the mess.”

Khakhau said the current executive could copy and paste the DA’s proposal in the interest of ensuring students are not left behind.

“We’re not grandstanding. What is at stake is that students are going to continue getting hungry without places to stay,” she said regarding the DA’s concerns with how the current NSFAS model funds student accommodation. DM

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Heher recommendations

DA funding criteria

‘Somebody needs a tangible solution’