NATIONAL STUDENT FINANCIAL AID SCHEME NSFAS was established in 1999 as a public entity by an act of Parliament to provide for the granting of loans and

NATIONAL STUDENT FINANCIAL AID SCHEME

NSFAS was established in 1999 as a public entity by an act of Parliament to provide for the granting of loans and bursaries to eligible students at public higher education institutions

and for the administration of such loans and bursaries; and to provide for the recovery of loans.

Building a Sustainable Financial Aid Scheme

MAIN FOCUS OF NSFAS

The main focus of NSFAS as contained on the preamble to the NSFAS Act is:

•to redress past discrimination and ensure representivity and equal access;

•to respond to human resource development needs of the nation; and

•to establish an expanded national student financial aid scheme that is affordable and sustainable.


NSFAS IN A NUTSHELL

2005 Academic Year 2006 Academic Year

(05/06 Budget Year) (06/07 Budget Year)

No of Loans 122,749 125,000

No of Students 107,851 110,000

Average Loan R 11,690 R 12,000

Total Value R 1,260,766,759 R 1,315,224,543

As more funds are received the total Value of loans for 2006 should grow by approximately a further R50 million


BUDGET SUMMARY

2005 Academic Year 2006 Academic Year

2005/06 2006/07

Department of Education (DE) R 869,092,000 R 926,378,000

NSFAS re-injection of recoveries and interest R 303,452,659 R 332,648,084

Other Funding R 80,050,520 R 81,318,543

Partnerships / Private Sector Funding R 4,075,000 R 6,500,000

Institution R 32,069,239 R 35,000,000

Total R 1,288,739,418 R 1,381,844,627

Loans vs administration R 1,288,739,418 R 1,346,844,627

Loans and bursaries R 1,260,766,759 R 1,315,224,543

Administration R 27,972,659 R 31,620,084


KEY PARAMETERS

NSFAS maximum award is equivalent to the National Average Full Cost of Study for the first time in 2006

2005/06 2006/07

Maximum Award R 30,000 R 32,500

Minimum Award R 2,000 R 2,000

Interest Rate 5% 6%

RECOVERIES


R 0.00

R 200,000,000.00

R 400,000,000.00

R 600,000,000.00

R 800,000,000.00

R 1,000,000,000.00

2004/ 05 2005/ 06 2006/ 07 2007/ 08 2008/ 09


RECOVERIES

Monthly Example

NSFAS continues to implement improved loan recovery strategies resulting in improved collections

Monthly Average % Increase

Feb-04 R 14,416,107

Feb-05 R 18,607,659 29.08

Feb-06 R 22,096,770 18.75


ALLOCATIONS 2006

INSTITUTION % of Allocation INSTITUTION % of Allocation

CAPE PENINSULA 5.40 PRETORIA 4.48

CAPE TOWN 3.11 RHODES 0.58

CENTRAL 3.10 STELLENBOSCH 0.89

DURBAN 6.44 TSHWANE 11.94

FORT HARE 1.75 UNISA 4.70

FREE STATE 3.15 VAAL 5.09

J OHANNESBURG 8.32 VENDA 2.95

KWAZULU NATAL 7.48 WALTER SISULU 5.83

LIMPOPO 4.72 WESTERN CAPE 3.31

MANGOSUTHU 2.91 WITWATERSRAND 4.06

NELSON MANDELA 3.66 ZULULAND 2.65

NORTH-WEST 3.47 TOTAL 100

Teacher education ring fenced funds of R63 million is allocated according to proposals from HEI’s


SPENDING HIGHLIGHTS

Just over 98% of NSFAS funds are spent in the form of direct awards to students

The administrative expenditure (just less than 2%) is kept to a bare minimum and consists of:

• Salaries 41%

• IT equipment and services 9%

• Postage and Printing 26%

• Auditors and Actuaries 5%

• Communications and Workshops 5%

• Other Expenses 14%

All procurement is conducted in accordance with Treasury Regulations


STRATEGIC GOALS

To provide access to higher education for financially needy South Africans who are academically able, in support of the country’s HRD strategy, while making a contribution to the alleviation of poverty. To raise sufficient funding to enable NSFAS to realise its strategic goals and objectives.

To confirm a new allocations formula that is in line with the new higher education transformation framework, for the equitable distribution of funds, in allocating funding in a satisfactory manner. To communicate NSFAS effectively with all its audiences, seeking to make NSFAS the funder of choice.


STRATEGIC GOALS

To provide effective and efficient Human Resource management and administration ensure that staff are competent to execute and support the NSFAS Strategy; and are managed in accordance with best current practices.

To provide effective and efficient Human Resource management and administration ensure that staff are competent to execute and support the NSFAS Strategy; and are managed in accordance with best current practices..

To implement e-business strategies to enhance collaboration with higher education institutions, thereby increasing the efficiency of the Scheme.

To ensure the effective governance, management and administration of NSFAS.


BOARDS ROLE IN ADVISING THE MINISTER

One of the functions of NSFAS is to advise the Minister on matters relating to student financial aid [Section 4(f) of the NSFAS Act].

Current areas of investigation in this regard:

• Review of Allocation Formula

• Incentives for Completion of Studies in Minimum Period of Study

• Minimum Criteria to be met for Continued Support from NSFAS

• Targeting of Scarce Skills


SOME AREAS OF FOCUS

•Increased electronic interface with institutions including the use of electronic Loan Agreement Form

•Envisaged reduction in Age of Majority

•Improved communication with institutions, particularly with VC’s regarding audit findings

•Compliance in respect of a forthcoming new National Credit Act

•Reach out to South African private sector and other funders

•Continued focus on reaching all prospective and deserving students

Documents

NATIONAL STUDENT FINANCIAL AID SCHEME NSFAS was established in 1999 as a public entity by an act of Parliament to provide for the granting of loans and