The National Student Financial Aid Scheme

1
The National Student Financial Aid Scheme (NSFAS)
Facilitating access to higher education for needy
students
2
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?
3
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.
4
Extract from the NSFAS letter to VCs and
Financial Aid Officers

5
NSFAS Upfront Payments to universities

• In the 2008 academic year, 20 of the
  universitys 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.

6
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

7
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.

8
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.

9
Extract from NMMU communication to NSFAS students
Qualifying students could receive the following
maximum benefits. 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
10
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

11
Active contact with universities

• Currently, there is considerable interaction
  between the
• FAO and NSFAS operations.
• This interaction will be supplemented by
  Provincial
• NSFASFAO 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.

12
The NSFAS Plan to communicate with students

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

13
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.

14
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.

15
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.

16
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.

17
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.

18
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.

19
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.

20
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.
21
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.

22
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
• universitys Student Admin System and sends a
  completed
• agreement form to NSFAS via the Internet.

23
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.

24
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
  students
• details will be delivered to NSFAS via the
  Internet.
• The students details will be automatically
  updated on the
• NSFAS system.

25
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.

26
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?

27
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.

28
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.

29
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.

30
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.