Presentation for Set 4: Day Two15 November 2016

COMMISSION OF INQUIRY INTO HIGHER EDUCATION AND TRAINING:

STUDENT FUNDING

Presentation OverviewEligibility for NSFAS funding1

The NSFAS means test2

3 Funding to universities and TVETs

4 Different funding programmes

5 A detailed look at the student centred model

6 Measuring impact

7 Questions

Eligibility for NSFAS funding

How is this defined and differentiated between

Universities and TVET colleges?

Exec Coaching

Delegations

Staff sessions

TONEFRO

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TOP

BUILDING

A TEAM

ETHOSSMF

PMO

NCOs

Eligibility principles“To redress past discrimination and ensure representivity

and equal access;

To respond to the human resource development needs of

the nation” (Preamble to the Act)

“loans or bursaries granted by the Board may be subject to

such conditions as it may determine, either generally or in

respect of a particular loan or bursary” (Section 19 – 1)

“a right to obtain a loan or bursary from the NSFAS cannot

be construed from any provision of this Act” (Section 19 – 6) Hel

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Two-pronged core eligibility criteria4

Financial Need

• Targeting tool – means testing recognized as a legitimate mechanism for determining who should receive benefits from the State e.g financial aid.

• Multi-purpose – differentiate those that need the financial support the most from those who require it the least PLUS determine how much support is needed.

• Affordability – In line with values, NSFAS aims to offer affordable solutions for students to study at public universities and TVET colleges

Academic potential

• What does the Act provide – “if the borrower does not perform satisfactorily in his or her studies, the Board may terminate the granting of finance ….”.

• Sufficiency – for all first-time entering students, NSFAS recognises that the academic admission of students to a higher education programme is sufficient as an indicator of “potential to succeed”.

• Reasonableness – Funding made available should continue to be allocated only to those making sufficient academic progress to complete within 2 years of regulation time (N+2).

• Minimum requirement – NSFAS set a course pass rate of 50% for continued funding, but many institutions have adopted different practices.

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“Aim of the NSFAS is to provide financial aid to eligible students who meet the criteria for admission to a higher education programme.”

(Section 2 – 2)

Eligible

South African citizens only, registered to

study for an accredited, funded programme at a South African public

university or TVET college.

Specific funders, at their discretion, may fund students to do courses at Private Institutions

UNDERGRADUATES studying towards

their first higher education qualification, or studying for a

postgraduate qualification required in order to practice in a professional

field (e.g. PGCE, LLB); unless funder determines otherwise

CORE:

Student is able to demonstrate potential for academic success, and

that he/she is financially needy.

Not eligible

Students who have already graduated from a first undergraduate degree or

diploma (regardless of whether or not this was funded by NSFAS)

OTHER FUNDING:

Students who have received loans, bursaries or scholarships from non-NSFAS sources

that cover the full cost of study

EXCLUSIONS:

General rule: no Btech’s (but list of those that can be funded in Handbook);

No short courses or

qualifications/courses that are non-degree/diploma purposes

Eligibility for

financial aid

SPECIFIED AS PART OF THE

HANDBOOK

Not all funders apply the same

eligibility criteria

Pre-selected students by some

donors may not adopt all these

criteria

Other funders that have narrower

criteria

Pages 62 – 68 (2016 edition)

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Full cost of study –

How do we understand this, and how has this changed over time?*

NSFAS funding CAP – how is this determined?

How is the split between fee tuition and other allowances, is determined

Allocation Formula –

Constructed on the basis of projected full cost of study * and

enrolment by race

Expected Family Contribution – a calculation from the means test that

determines the relative need of students in respect to family income and household

costs

Data-driven decision making at NSFAS

* An

allocations

standard

operating

procedure

outlines this

process

The full cost of

study (FCS) and

the NSFAS cap

FCS used as a projection of the following year’s likely academic cost for the allocation formula and the calculation of the NSFAS capped amount – a “calculated estimate of what it will cost a student to study at university for one year” –expanded over time to include wider range of costs

Once funding decision made, FCS is used to refer to the cost of study inclusive of actual fee account charges and allowances

NSFAS has data as far back as 2005 on these estimates.

Accessibility Transparency Affordability Reliability Authenticity

WITWATERSRAND R 46 802,00 R 9 340,00 R 33 660,00 R 19 008,00 R 108 810,00

CAPE TOWN R 52 237,00 R 42 398,00 R 15 667,00 R 3 300,00 R 113 602,00

JOHANNESBURG R 24 929,00 R 24 854,00 R 4 756,00 R 3 225,00 R 57 764,00

PRETORIA R 37 900,00 R 33 200,00 R 28 800,00 R 99 900,00

RHODES R 38 950,00 R 1 650,00 R 49 300,00 R 5 000,00 R 94 900,00

DURBAN R 27 635,05 R 21 615,25 R 22 320,00 R 9 600,00 R 81 170,30

VENDA R 28 543,22 R 2 720,00 R 17 590,00 R 24 410,00 R 5 000,00 R 78 263,22

NELSON MANDELA R 25 710,00 R 950,00 R 23 740,00 R 17 610,00 R 3 000,00 R 71 010,00

LIMPOPO R 24 431,00 R 5 000,00 R 14 500,00 R 21 622,00 R 4 000,00 R 69 553,00

FORT HARE R 28 413,00 R 2 630,00 R 26 000,00 R 10 000,00 R 4 000,00 R 71 043,00

STELLENBOSCH R 39 235,00 R 32 755,00 R 15 000,00 R 86 990,00

FREE STATE R 21 774,48 R 950,00 R 29 045,00 R 16 000,00 R 5 000,00 R 72 769,48

WESTERN CAPE R 22 400,00 R 1 210,00 R 17 710,00 R 20 000,00 R 6 000,00 R 67 320,00

NORTH-WEST R 37 810,00 R 1 560,00 R 17 500,00 R 12 000,00 R 8 000,00 R 76 870,00

KWAZULU NATAL R 31 710,91 R 23 265,00 R 17 500,00 R 5 000,00 R 77 475,91

CENTRAL R 19 502,93 R 858,00 R 18 020,00 R 18 000,00 R 5 000,00 R 61 380,93

VAAL R 20 238,00 R 870,00 R 20 611,00 R 22 300,00 R 4 000,00 R 68 019,00

CAPE PENINSULA R 19 177,00 R 745,00 R 23 409,00 R 2 000,00 R 3 500,00 R 48 831,00

TSHWANE R 18 356,88 R 1 500,00 R 13 331,48 R 20 564,00 R 4 600,00 R 58 352,35

MANGOSUTHU R 21 612,00 R 2 000,00 R 25 360,00 R 19 008,00 R 9 500,00 R 77 480,00

WALTER SISULU R 20 220,00 R 23 498,00 R 10 000,00 R 2 000,00 R 55 718,00

ZULULAND R 17 648,00 R 2 837,00 R 14 851,00 R 13 200,00 R 2 000,00 R 50 536,00

UNISA R 13 350,00 R 5 000,00 R 18 350,00

SPU R 24 125,97 R 23 500,00 R 3 973,33 R 6 716,67 R 58 315,97

UMP (UNIV MPUMALANGA) R 25 246,40 R 3 000,00 R 16 500,00 R 16 500,00 R 1 809,30 R 63 055,70

SMU (SEFAKO MAKGATHO UNIV.) R 38 945,00 R 5 000,00 R 16 052,00 R 28 000,00 R 7 000,00 R 94 997,00

AVERAGE R 27 957,80 R 2 518,82 R 24 090,59 R 16 593,26 R 4 880,48 R 72 402,96

TABLE A4 - FULL COST OF STUDY - 2015

Institution Tuition Registration Residence Meals BooksFCS (A)

Actual Fee

* Tuition costs

account for

between 31%

(MUT) and

52% (WITS) of

the FCS

** Average

FCS of 12

universities

above NSFAS

cap.

In 2015, cap

was R71 800.

*** allowance

costs

recommended

by NSFAS but

determined at

university

discretion

Allocations formula – the basis of NSFAS’

funding of universities

‘Circles’ of influence

Racial breakdown

of students – FTE

enrolment

- Disadvantaged

student index

(DSI)

Full cost of study

(FSC)

Tuition

Residence

Allowances

Allocation (and

allocation

formula) for the

previous year +

MTEF grant

HEIs

NSFASHEMIS

FCS

X

DSI (weighting based on race)

=

Apportionment

Factor (AF) applied

to the MTEF grant

= DSCI

DISADVANTAGED STUDENT

INDEX

DISADVANTAGED

STUDENT COST INDEX

(notional value)

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NSFAS’ means test

Differentiating between those who are able to pay and

those that can’t

NSFAS Act 56 of

1999Purpose of

means test Determines the relative need

of all the students who have

applied (EFC)*

Determines how much

funding a student requires

based on their full cost of

study (FCS)

Determines which students

are not eligible (where EFC =

FCS)

Does not apply an income

threshold (exception: TVET

bursary funding AND funding

for students with disabilities)

TVET funding = income

threshold of R122 000 below

which EFC = R0

Funding for students with

disabilities = income

threshold of R400 000 (2016)

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* For all means-test waived students, EFC = R0

Means test – Calculating EFC and award size

Total net income = gross family income – (minus) tax as per the income tax rates for

individuals (updated annually)

Estimated Disposable income = total net income – (minus) cost-of-living (subsistence allowance

for family, dependent on number of household members

AND where the family lives)

Expected family contribution (EFC) = disposable income x

0.33 (one tertiary level student) OR 0.20 (two/more tertiary level

students)

Means test – Calculating EFC and award size

Full cost of study (as per individual

student fee account, incl. allowances, where

payable*)

Non-NSFAS bursaries or scholarships

awarded to the student

Expected family contribution (EFC)

NSFAS loan or bursary awarded

Total net income = gross family income – (minus) tax as per the income tax rates for individuals

(updated annually)

Disposable income = total net income – (minus) cost-of-living

(subsistence allowance for family, dependent on number of household

members AND where the family lives)

Expected family contribution (EFC) = disposable income x 0.33 (one tertiary level student) OR 0.20

(two/more tertiary level students)

* Learning materials allowance (incl. laptops, books, art equipment, Labcoats, etc.), meals where not

provided, private accommodation where applicable,

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MEANS TEST REQUIREMENTS

Proof of income of parents,

guardian (not older than 3 months)

Certified copies of ID: own, parents

and all members of household

Copies of registration of a sibling at

another tertiary institution

Separate annexure required for all

first-time applicants with disabilities

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In the online application process, students

who are means-test waived only need to

supply their own ID copy, as background

validations with Umalusi and SASSA

databases are done. No family income

required. However, all paper-based

applications must include all supporting

documents.

Validations with Home Affairs are now

done – this will contribute significantly to

verifying the eligibility of individual students

to funding, and reduce wastage and fraud.

Overview of funding to Universities and

TVETs

Mapping the funding to universities and TVET colleges

in the last few years

2016 Academic Year - Funding Allocations

27

Source: NSFAS Strategic Plan 2016/17-2019/20

Source Amount

DHET - Universities R4.3bn

DHET - TVET Colleges R2.3bn

National Skills Fund R849m

Department of Basic Education - Funza Lushaka R1bn

Department of Social Development (Provisional) R276m

NSFAS Recoveries R450m

Universities’ own funding (Estimated) R200m

Sector Education and Training Authorities R215m

Other Funders (Provisional) R320m

Sub - Total R10.34bn

Additional funding for student’s historic debt R2.543bn

Additional funding for students to continue R2.039bn

Total R14.922bn

2016 - Mid-term budget: Funding Allocation

Additional R9,2bn made available for student funding – over the MTEF Period.

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University

Allocations 2016R12,6bn in 2016

DHET - Universities

National Skills Fund

Department of Basic

Education - Funza Lushaka

Department of Social

Development (Provisional)

NSFAS Recoveries

Universities’ own funding

(Estimated)

Sector Education and

Training Authorities (SETA)

Other Funders (Provisional)

Additional funding for

student’s historic debt

Additional funding for

students to continue

Programme costs are approved by

the DHET annually ito funding norms

DHET makes allocation to each

college on the basis of enrolment for Report 191 and

NCV

Bursary covers the 20% student own

contribution to tuition

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TVET bursary

programme

Introduced in 2007

Only funding for the

NCV and Report 191

programmes (both

highest NQF level = 4)

Purpose: Attract young

learners into vocational

education and training

Approx. 33-35% of

students in these

programmes are funded

by NSFAS

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TVET bursary

programme

Report 191

National Curriculum

Vocational (NCV)

No longer two

allocations per TVET –

single allocation for

both programmes of

funding

TVET Colleges 2016 Allocations

R2,3bn

Year # university

students

Value of funding

2009 135 202 R 2 818 220 032

2010 148 387 R3 343 530 674

2011 216 874 R4 833 866 379

2012 194 504 R5 871 489 880

2013 194 923 R6 729 069 970

2014 186 150 R 6 969 940 822

2015 178 961 R 7 194 618 509

Year # of TVET

college students

Value of funding

2009 55 173 R 312 666 821

2010 61 707 R317 998 191

2011 114 968 R1 116 590 548

2012 188 182 R 1 822 497 265

2013 220 978 R 1 953 253 361

2014 228 642 R1 991 487 809

2015 235 988 R 2 095 129 942

University vs TVET funding

What NSFAS funds?

Supporting students to access funding that will contribute

to the human resource development needs of the Country

40/60 convertible loansAnnual reconciliation of individual student academic performance. Up to 40% of the loan amount converted to a bursary.

100/0 convertible loans

On graduation:Full loan value of final year of study converted to grant.

100% non-convertible loans

No portion of the loan is converted to a grant.

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NSFAS loan

product ‘typology’ Funding from the DHET – 40/60

loans

Funding from the DHET – 100/0

loans (final year)

Institution Loans

40/60

100% (no conversion)

Other loan funding

NGO-programmes

(40/60)

SAICA/Thuthuka

EC and KZN Premier’s

Office (40/60)

Outlier – Bursary to Loan

conversion (for students

who default on their work

back commitments)

34

Discounting NSFAS loans – the “hidden grant”

Interest levied at 80% of the repo rate – for the life of the loan Updated annually as at 1 April of each year – pegged In-Duplum rule is applied

Interest not charged while still studying – provision only applies to students who were studying on/after 1 April 2011

12 months interest holiday following exit from university – graduation or drop-out

Depending on academic performance, up to 40% converted to a loan at the end of financial year

Annual adjustment to the loan value

Unutilised funds on the student fee account (tuition payment to university) and on allowances (sBux) annually credited to loan account as ‘repayment’

LOAN TO BURSARY CONVERSION

INTEREST HOLIDAY

INTEREST RATE

CREDIT BALANCES

Government Gazette 2014Top 100 Occupations in Demand. 2-yr review lifecycle.Definition: those occupations in which there are currently a scarcity of qualified or experienced people, currently or anticipated in the future (absolute or relative scarcity)

Scarce Skills (as per NSF)*

BCM: Accounting, Financial Management, Actuarial Studies, Auditing,

Bus Man, Economics, Financial Accounting;

SET: Physics, Comp Sc, Chemistry, Geology, Info Systems,

Mathematical Sciences, Agric, Stats, Biotech, Engineering;

Postgraduate Studies

Only Honours programmes, no BTechs (exceptions).

Masters where funding available or special programmes.

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NSFAS bursary

products for

scarce skills Funding from the DHET –

for Students with Disabilities

Funding from the NSF – for

Scarce Skills as per an

agreed list

Funding from the NSF – for

postgraduate study

Funding from the DBE – for

initial teacher education

(Funza Lushaka)

Funding from the DSD – for

social work

Funding from the SETAs –

for each of their identified

scarce skills

Specialised funding from the

NSF – NIHSS etc * SETAs have also developed SSPs (sector skills plans) that identifies scarce skills in

their sector, and pivotal skills (top-10)

Background to

the Historic

Debt Funding

• #FeesMustFall campaign Presidential Task

Team (PTT) to determine nature and extent of the

funding challenges

• PTT requested that universities submit lists of

NSFAS-eligible students with outstanding debt

from 2013 to 2015 to the DHET

• As indicated by DHET, 71 753 students were

included on this list, and from this, the DHET made

available R2,543bn for the students indicated on

these lists

• These students who are still in the system in 2016

will be assisted with a further additional allocation

of R2,039bn

Historic Debt

Unfunded is a NSFAS-

eligible student not

funded as there were

no NSFAS funds

remaining (EFC too

high)

Historic debt is costs which have

been charged to the student fee

account for tuition and residence

for the academic years 2013,

2014 and 2015, and which have

not been paid to date.

This debt has resulted in the

student being financially

excluded from the university or

not being able to access results

or a graduation certificate

those who had a loan

award that was top-

sliced,

OR those who added

courses or costs after

their NSFAS contract

had been signed, and

no funds available

Unfunded Underfunded

excludes EFC which have not been paid to

date; AND those whose recommended award

was greater than the capped loan amount

determined by NSFAS for that year.

Student centred model – who, what, why?

Meeting the mandate to provide systems through which

qualifying students can apply for and receive loans

Applications Options

Processing

Loans & Bursary

Operations

Online

Fax/Email

Posted

Application Results to Students

Universities

&

TVET’s

Information exchange between

NSFAS & Institutions

Solution is designed to work with less manual intervention; however society dynamics

requires us to look at different options to deliver the same service to students

Allowances pocket for students

Students receive Money for

allowances in a form of a voucher

Student-centred allowance payment system - sBux

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Student checks

voucher number by

dialling *134*176# and

will see R50 is

available for books

Student provides voucher

number to merchant

Merchant enters

number into POS

(till)

sBux

Voucher is checked

(is number valid?

sufficient funds?)

and merchant account is credited

Merchant receives confirmation of the

successful transaction and the student

receives a new voucher for the change.

Student registers

and has signed

LAFSOP

4 991 427 transactions

to date

(Q2 802 913)

R 778 95 116 spent to

date in 4 categories

(Q2 99 539 049)

3 413

merchant

outlets in total

R 816 829 203 disbursed

to date

(Q2 85 132 076)

124 385 student

accounts since

February 2014

sBux

spend

2016

Measuring impact

Using different mechanisms to track the success of the

Scheme in student funding and producing graduates

Performance

information -

Universities

53%

55%Student

retention. Based on DHET

data, only 8

universities have less

than a 15% drop-out

rate at the end of first

year**. National

average 25,2%

Completion.55% of students (SU study)

received qualifications within

9 years, most in N+1, with

only 38% drop-out (2000

cohort)

25,2%

76,6%

Drop-out.While it is estimated that

30-40% of students

drop-out in the first year

of study, data shows

53% never graduate

Academic pass

rate.From 1996 to 2015,

average courses

passed rate was 76,6%*.

* Courses passed rate is not a reflection of whether a student is on track to graduate

within regulation time neither is it indicative of the credit value of each course

enrolled for. Historically collected for bursary conversion purposes.

** These include UCT, UP, UKZN, NWU, Rhodes, UL, SUN and WITS

Key Findings - Throughput# of students who enter higher

education

# of students who progress through higher education

# of students who complete their qualification

• CHE and DHET studies (ALL students) – 20% complete within N; 34,4% within N+1; 42,8% in N+2

• CHE: By race – more white students complete within N (42%) than Indian (26%), than coloured (23%)

than African (19%)

• DHET: White females most likely to complete within N (61,4%) and graduation rate for African females

slightly higher than for African males

• DHET: When looking at completion within 5 years, ONLY 11 universities had more than 50% of the 2005

intake completed by 2009 (appearing highest first, then in decreasing value): Rhodes, UCT, SUN, UKZN,

NWU, UP, WITS, UL, CUT, UJ and CPUT. Three universities had a completion rate of less than 40% after

5 years: TUT, WSU and VUT.

More specific-NSFAS data will be available March 2017 once the DHET has finished it’s cohort study.

Throughput is a

factor of :

… in regulation time (N)

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2017 Academic Year

Preparation for the 2017 academic year, progress to date

and the plans in place

Registrars

Flight Plan

2017Jan Mar May Jul Sep Nov 2017

1st Entrants Applications Open1/8/2016

University results15/12/2016

TVET results22/12/2016

Umalusi Results6/1/2017

VC/ CFO engagements

FAO/ SRC Registrars Working Group

Registrars Working Group

Including Pilot Institutions

Disability Group Engagement

7/10/2016

Returning Students1/09/2016

• 1st Solution release went live 1st August as planned

• 2nd Release took place in October 2016

• Sector engagements started and completed successfully. The team continues to work with University Registrars and

working groups to ensure program success

• SRC and other student political formation engagement completed. Further engagements are in place to address

concerns raised

• New SRC leadership (incoming for 2017 academic year) will be engaged once in place

NSFAS Solution Build

Sector Engagements

Today

Application open window

Create MyNSFAS account

Generation of LAFSOPs,

signing and appeals

Cycle 1

Disbursement of funds –

Tuition to university (quarterly)

Allowances to students via

sBux (monthly)

Key activity

milestones January to

November

2017January

to March

2017

Countdown

to application

closing date48

Ranking and provisional funding

Registration – actual costs

January and

February

2017

Assessment of applications

received – both online and

paper-based

1 August to

30

November

1 September to

31 December

2016

January

to March

2017

Reporting to stakeholders

Monitoring drawdown on funds

Planning for the 2018 implementation

April 2017

to March

2018

Target

migration to

the “SCM”

Application Status Update

Accessibility Transparency Affordability Reliability Authenticity

Manual Application

process – NYDA centres across

the 9 Provinces

Co-operation with the

Methodist Church

Co-operation with the

SASSA Agencies

Vodacom Application

Centres (81)

………Organisational re-alignment is critical for the successful roll out of the student

centred model

………a systematic approach is important to drive operations excellence and effective

execution capability across the value chain

2017 and beyond …..

Becoming more

situated within the

post-school sector

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QUESTIONS