Higher Education Institutions Perspective on the Operation of NSFAS

1. Higher Education Institutions Perspective on the Operation of NSFAS Presentation to Higher Education and Training Parliamentary Portfolio Committee Cape Town 11 August 2009 1

2. Presentation Outline • HESA’s mandate and role • Higher Education sector’s achievements • Challenges facing Higher Education • HE funding trends • Implications of the funding trends on HE • HESA’s views on NSFAS (a) Strengths (b)Areas of improvements 7. Conclusion 2

3. HESA’s mandate and role • HESA is a voluntary organisation which represents the public higher education sector in South Africa • An independent body • All 23 public Higher Education Institutions in the country are members of HESA • The Vice-Chancellors of these universities are Directors of the HESA Board • The HESA Executive Office is led by the CEO and just over 40 staff members • The Executive Office facilitate the design, planning and implementation of programmes and projects to advance the sector’s interests 3

4. Focus Ares of HESA • 3 Roles • Policy analysis and strategic research (Head) • Advocacy and stakeholder influence (Voice) • Sector support (Hands) • Programmes: • Higher Education Leadership and Management • HE-Enrolment Services Programme • HE HIV and AIDS Programme • Focus Areas • Focus Area One: Building the sector’s capacity and academic capabilities • Focus Area Two: Strengthening Sector’s research, innovation and technology capabilities; and international and continental collaborations • Focus Area Three: Enhancing the sector’s contribution to national imperatives focusing on skills • Focus Area Four: Enhancing sector collaboration • Focus Area Five: Organising for effective and efficient delivery 4

5. Size & Shape of HE • 23 universities: 11 universities, 6 UOT’s, 6 comprehensive • 2 National Institutes – Mpumalanga & Northern Cape • Student enrolments increased from 585 000 in 1999 to 757 000 in 2007 in public HEIs • 50 public FET Colleges with approximately 378 000 students • Approximately 30 000 students are enrolled with private higher education providers • Approximately 60 500 international students enrolled in public HEIs in 2007

6. The achievements of HE sector (2000-2007) • Undergraduate enrolments in public HEIs have been growing by 4.9% p a; • Enrolments for PhD degree studies have been growing by 6.6% p a; • Enrolments of African students in public HEIs have been growing by 6% p a • Enrolments of women students in public HEIs have been growing by 5.5% p a • African students now make up 63% of the public HE student numbers – up from 58% in 2000; • Women students now make up 56% of the total student numbers – up from 52% in 2000 • Enrolments in Science, Engineering and Technology (SET) disciplines have been growing by 4.3% p a • For all undergraduate studies, the number of graduates has been increasing by 5.9% • Publication research outputs have been growing by 4.7% pa 6

7. Challenges facing HE system • The proportion of students enrolled in SET has remained fairly constant at 28% or 29% during the period 2000 to 2007 due to increase in enrolments in Business/ Management • Further work needs to be done to increase the gross HE participation rate (our participation rate increased by only 1% from 15% in 2001 to 16% in 2007 – far from the goal of 20% in the NPHE (2001) to be reached by about 2011 – 2016. • High drop-out rate of students in HE & low graduation rates • Graduation rates are skewed in favour of White and Indian students – while more African and Coloured have gained access to HE, relatively fewer of them complete their undergraduate studies. 7

8. HE Funding Trends • Special earmarked allocations for restructuring the institutional landscape - through mergers & incorporations) • Infrastructural grants to improve the quality of teaching and learning in universities • Block grants to cover the running costs have not been keeping pace with inflation and have, in fact , decreased in real terms since 2000 • Universities are forced to increase income from other sources such as tuition fees, contract research, endowments, commercialisation of intellectual property, sales of goods and services (short courses) • On average, 40% of all income for universities is from Government subsidies (down from 49% in 2000), about 29% from student tuition fees and about 31% from private income (up from 27% in 2000) 8

9. Implications of the HE funding trends • Universities increased their share of income arising from student fees and from private income; • Increased student fee levels have contributed to placing HE out of reach for academically deserving but poor students • Increased private income sometimes jeopardize the core functions of learning/teaching, research and community service of universities • An appropriate balance has to be found between the three sources of university funding (1st, 2nd and 3rd streams) • NSFAS student bursary and loan scheme can become instrumental in attaining this balance 9

10. Overview of NSFAS funding to HE • In 2008, 182 497 awards granted to eligible students • This includes 38 545 awarded to FET students, NIHE and schools • The number of students in the FET colleges assisted is 35 352 • In 2008, 5189 students of the Funza Lushaka benefitted • In 2008, 3602 students benefited through Department of Social Development scheme for social work training, etc. 10

11. Major Strengths of NSFAS • Advancing equity in access to HE: larger pool of poor students are able to access HE • Becoming a recognized disburser of financial aid for public as well as private funds: distribution and administrative capacity of loans and bursary funds • Loan recovery and replenishment of NSFAS funds: sustainability of the scheme through loan repayment system • Tried and tested administrative and accountability procedures 11

12. Areas for improvement • Delays in finalising institutional allocations • Finalisation of loan agreements between students and NSFAS (too time consuming & process cumbersome) • Inadequacies in existing institutional allocation formula (race-based etc) • Criteria for determining eligibility of students for NSFAS support • The present way of compiling the means test (a) The means test compilation is inadequate (b) Threshold value (c) EFC values (d) Educational delivery mode (e) Higher support levels for fewer students, or lower support levels for more students? 12

13. Areas for improvement (cont…) • Relationship between the bursary and loan component of applications • Increasing NSFAS funds • NSFAS support to priority fields of study • Extending NSFAS support to not-for-profit HE providers • Blacklisting of non-loan paying students • NSFAS’ administrative and allocation practices (a) greater e-based administrative platforms (b) HE-NSFAS interactions to understand the challenges faced by the Financial Aid Offices in HEIs (c) Staff capacity in Financial Aid Offices (training on NSFAS operation and administrative processes) 13

14. Areas for improvement (cont…) • NSFAS’ administrative and allocation practices (cont….) (d) NSFAS media and public communication campaign (e) Unclaimed institutional NSFAS funds (f) NSFAS’ governance and management arrangements (Board composition should include experience in university funding, student financial aid, broader students issues & administrative and financial management) 14

15. Big challenge for post-secondary system • About 2.8 million potential students (18-24 age cohort) are neither studying, employed nor disabled (CHET 2009) • Out of this 2.8 million, roughly 700 000 students with Grade 12 are not studying, employed or disabled (CHET 2009) • Approximately 1 million of this 2.8 million have between Grade 10-12, and can go into the FET sector (CHET 2009) • The biggest challenge is for South Africa to create the post-secondary education opportunities for these potential students • The implications are as follows: (a) Households cannot afford HE as they choose high cost unit (universities) and not low cost (FET colleges) (b) Post-secondary schooling system is not able to produce graduates who are work-ready 15

16. Big challenge for post-secondary system • As a result NSFAS is a transformation tool to promote equitable differentiation in terms of vocational and academic skills. • NSFAS should expand its support to students in the FET college sector • NSFAS should play a role in the distribution of opportunities in an unequal society 16

17. Conclusion • A well functioning and strengthened NSFAS is in the best interest of society (poor students, universities and government) • The NSFAS loan scheme has broadened poor (but academically deserving) students’ access to Higher Education – an important step in contributing to the creation of an equitable society • HESA affirms its full support for the Ministerial Review of NSFAS and will co-operate and assist the Review Committee in any way the Committee feels suitable 17

18. THANK YOU 18