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The National Student Financial Aid Scheme(NSFAS)

Facilitating access to higher education for needy students

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Question from the Portfolio Committee on Education:

What processes has NSFAS put in place to prevent new and returning students from being turned away from Higher Education Institutions because of an inability to fund the registration fees themselves?

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NSFAS Upfront Payments to universities

In line with current practice, in December 2008 NSFAS sent out letters to both Vice-Chancellors and Heads of Financial Aid Offices of all public universities informing them that NSFAS will make upfront payments available to facilitate the registration of students who are eligible for NSFAS funding.

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Extract from the NSFAS letter to VC’s and Financial Aid Officers

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NSFAS Upfront Payments to universities

• In the 2008 academic year, 20% of the university’s NSFAS budget was made available for upfront payments. • This year the percentage was increased to 30%.• Upfront payments can be used to pay registration fees, residence fees, food and book allowances where appropriate. • Upfront payments are available to universities on request from January through to March.

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University requests for upfront funding

• In 2008 the following universities requested upfront payments: UWC, Venda, Limpopo, CPUT, NMMU: - Rand value – R49m

• In 2009 thus far the following universities have made requests for upfront payments: - NWU, TUT and Limpopo; we expect others to follow - Rand value at present - R62m

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Extract from NMMU communication to NSFAS students

• The National Student Financial Aid Scheme (NSFAS) made it possible for you to register without the financial burden of paying your own registration fee for tuition and accommodation. It is now time for you to follow our instructions to further benefit from this scheme to enable you to have a successful academic year.

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Extract from NMMU communication to NSFAS students

• You need to complete a Pre-Agreement statement and a Loan Agreement form (LAF). Please collect these at the Financial Aid Office immediately after you have registered. (a) The LAF is a very important document that must be completed in black ink and returned to your Financial Aid Office. (b) Please read the Pre-Agreement carefully. (c) NB: Two certified copies of your ID must be handed in with the LAF.

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Extract from NMMU communication to NSFAS students

Qualifying students could receive the following maximumbenefits. However, this depends on total costs and your EFC.(Not all students will receive the maximum benefits).

(a) Book allowance R2000(b) Residence meals R5000 (initial

amount)(c) Living Allowance (PE students) R5700(d) Off-campus – out of town students R9700(e) Residence fees Variable

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Active contact with universities

• The NSFAS COO, Linda Nhlumayo and her team are in regular contact with Institutions. • Given that some universities experience cash flow problems, NSFAS has a system in place that facilitates the rapid transfer of upfront payments when necessary.• Support provided by NSFAS operation - Mediation between SRC and Management e.g. CPUT - Support e.g. VUT, Fort Hare

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Active contact with universities

• Currently, there is considerable interaction between the FAO and NSFAS operations.• This interaction will be supplemented by Provincial NSFAS–FAO Workshops to discuss roles, responsibilities and processes. A key aspect of this initiative is that it will involve ALL staff in the Financial Aid Office and not just the HOD as in the past. • This initiative over time will build greater understanding and capacity.

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The NSFAS Plan to communicate with students

In the review conducted by the CEO on arrival in 2008, NSFAS realised that:

(a)Many students only became aware of NSFAS when they arrived at university.(b) There was a need for university students nationally to be given consistent, up to date and accurate information about NSFAS.

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The NSFAS communication plan

In response to the review findings:

• NSFAS has taken a decision to increase its contact with schools particularly in rural South Africa.• It is in the interest of students for NSFAS to have a physical presence at universities during student registration.

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The NSFAS communication plan

What have we done to date in respect of the above?

NSFAS went out to tender and engaged the services of Pace Career Consulting and the Arts & Training Initiative to assist with the university registration period. Suppliers to reach schools will soon be appointed.

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Communication continued…

• During student registration this year (2009), NSFAS ran a pilot at VUT, Pretoria, CPUT, UWC, UCT, Univ of Zululand, Univ of Limpopo, NMMU. • As part of the pilot exercise, NSFAS was on the program during (new student) orientation at 2 Limpopo campuses and 7 WSU Campuses.

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Communication continued…

• The pilot has given NSFAS and its two chosen suppliers important insights which we will take forward and incorporate into our training. • The success of the pilot informed the NSFAS decision to rollout our service presence during registration at all universities nationally.

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The communication plan to students at schools

• Using outside suppliers, NSFAS intends visiting schools to introduce the concept of financial aid to school learners as part of a career guidance counselling initiative. • Where appropriate, NSFAS will align itself with other similar initiatives e.g. the HESA initiative. • NSFAS will report progress to the Portfolio Committee later in the year.

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Late receipt of funds by students

• NSFAS actively engages universities to submit their documentation and claim their NSFAS monies promptly so that student fee accounts can be credited. - 1st semester claims come in from April. - Institutions are expected to claim both 2nd semester claims and at least 80% of their total NSFAS allocation by September.

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Late receipt of funds by students (updated)

• The vast majority of universities, 20 out of 23, met the September 2008 target.• 2 of the universities that did not meet the 80% target did however claim 70% of their allocation.(Venda &Zululand).

• Fort Hare made its first claim in November.

• In the 2009 academic year and as of yesterday, Dr Tom informs me that all undergraduate students have already been registered.

• The NSFAS-WSU partnership worked well in 2008, in respect of how funding to students was managed.

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The systemic problem

In the internal review conducted in 2008, NSFAS recognised that its manually intensive operation placed a huge administrative burden on Institutions. As funding to NSFAS has increased over the years so has the administrative burden.

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The systemic problem cont…

• In 2008, for example, the universities collectively had the task of making sure that 155 000 agreement forms were correctly filled in, signed and sent to NSFAS for processing. • NSFAS returns forms that are in error and cannot be processed. This further delays the transfer of money to the institution and therefore the student.

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What are we doing about the systemic problem

• In September 08, NSFAS reported that it is computerising its manually intensive operations. We also reported that pilot studies are being conducted at DUT and TUT to test the Electronic Loan Agreement Form system – an application that populates the student details from the university’s Student Admin System and sends a completed agreement form to NSFAS via the Internet.

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What are we doing about the systemic problem…

• We can now report that the pilot was successful and NSFAS is ready to “go live” with the system in the 1st semester this year at UKZN, UJ, TUT, DUT, NMMU and UCT.• Yesterday Dr Tom agreed to Fort Hare “going live” with the new system.• We are actively working on progressively bringing on board 19 of the 23 universities from the 2nd Semester onwards.

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What will the new system deliver?

• Much faster turnaround time :

- From the time the student agrees to the terms and conditions of relationship with NSFAS and hits the enter key on the computer at the university, the student’s details will be delivered to NSFAS via the Internet. • The student’s details will be automatically updated on the NSFAS system.

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What will the new system deliver?

• The payment process to institutions will be initiated so that they will receive payment from NSFAS for each batch of students in every 48 hour cycle. • The pilot demonstrated that this IT application will dramatically reduce the time it takes for the university and student to get funding from NSFAS.

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Award amount per student

One of the issues raised with NSFAS by students is the need to prescribe a minimum package that the university makes available to students. • The problem NSFAS faces is that demand for NSFAS funding exceeds the annual budget. • The first-come-first-serve model has unintended consequences. What happens to those students who do not make the cut?

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Award amount per student

• Crucially, undergraduate funding is recurrent, spanning 1 or more decades, and as such, complex decisions on affordability and sustainability rest with powerful organs of state.

• Irrespective of the technologies that are being introduced, the working relationship with Universities and their Financial Aid Offices is the critical success factor for NSFAS.

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Award amount per student

In the interim, what is NSFAS doing?

• Taking into account the feelings of Portfolio Committee in February 2008, NSFAS implemented a strategy to re- distribute un-utilised funds from some universities to those with a need within the academic year. This has been well received by universities.

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Award amount per student

• In December 2008, the Minister made an additional R39m available. This was distributed using a model developed by DOE and NSFAS to reduce the debt of students receiving smaller NSFAS awards.

These initiatives have been very successful.

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Conclusion

NSFAS is aggressively looking to identify issues impacting on access to education for needy students and finding solutions.

• Irrespective of the technologies being introduced , the critical success factor for NSFAS is its relationship with Universities and their Financial Aid Offices.