Presentation for Set 4: Day Two - 15 November 2016 - Department of Justice
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COMMISSION OF INQUIRY INTO HIGHER EDUCATION AND
TRAINING:
STUDENT FUNDING
Presentation for Set 4: Day Two
15 November 2016
Presentation Overview
1 Eligibility for NSFAS funding
2 The NSFAS means test
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?
Eligibility principles
Helping students build a brighter tomorrow
“To redress past discrimination and ensure representivity
and equal access;
To respond to the human resource development
TONEFRO needs of
BUILDING
M THE
the nation” (Preamble to the Act)
A TEAM
TOP ETHOS
SMF
“loans or bursaries granted by the Board mayPMO
Exec Coaching
Delegations
be subject to
such conditions as it may NCOs
determine, either generally
Staff sessions 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)
4
Accessibility Transparency Affordability Reliability Authenticity
Two-pronged core eligibility criteria
Financial Need Academic potential
• Targeting tool – means testing recognized as a • What does the Act provide – “if the borrower
legitimate mechanism for determining who should does not perform satisfactorily in his or her
receive benefits from the State e.g financial aid. studies, the Board may terminate the granting of
• Multi-purpose – differentiate those that need the finance ….”.
financial support the most from those who require • Sufficiency – for all first-time entering students,
it the least PLUS determine how much support is NSFAS recognises that the academic admission
needed. of students to a higher education programme is
• Affordability – In line with values, NSFAS aims sufficient as an indicator of “potential to succeed”.
to offer affordable solutions for students to study • Reasonableness – Funding made available
at public universities and TVET colleges 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.
“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)
SPECIFIED AS PART OF THE Not
HANDBOOK Eligible
Not all funders apply the same eligible
Helping students build a brighter tomorrow
eligibility criteria
Pre-selected students by some
donors may not adopt all these
criteria South African citizens only, registered to
Students who have already graduated
Other funders that have narrower study for an accredited, funded from a first undergraduate degree or
criteria programme at a South African public diploma (regardless of whether or not this
university or TVET college. was funded by NSFAS)
Pages 62 – 68 (2016 edition)
Specific funders, at their discretion, may fund
students to do courses at Private Institutions
OTHER FUNDING:
UNDERGRADUATES studying towards Students who have received loans, bursaries
their first higher education or scholarships from non-NSFAS sources
qualification, or studying for a that cover the full cost of study
postgraduate qualification required in
order to practice in a professional
field (e.g. PGCE, LLB); unless funder
determines otherwise
EXCLUSIONS:
General rule: no Btech’s (but list of those
Eligibility for CORE:
Student is able to demonstrate
potential for academic success, and
that can be funded in Handbook);
No short courses or
qualifications/courses that are non-
financial aid that he/she is financially needy. degree/diploma purposes
Data-driven decision making at NSFAS
Full cost of study – NSFAS funding CAP – how is this
determined?
How do we understand this, and
How is the split between fee tuition and
how has this changed over time?* other allowances, is determined
Allocation Formula – Expected Family Contribution – a
calculation from the means test that
* An
Constructed on the basis of determines the relative need of students
allocations
standard
projected full cost of study * and in respect to family income and household
operating enrolment by race costs
procedure
outlines this
process
TABLE A4 - FULL COST OF STUDY - 2015
The full cost of Institution Tuition Registration Residence Meals Books
FCS (A)
Actual Fee
* Tuition costs
account for
between 31%
study (FCS) and WITWATERSRAND
CAPE TOWN
R 46 802,00
R 52 237,00
R 9 340,00 R 33 660,00
R 42 398,00
R 19 008,00
R 15 667,00 R 3 300,00
R 108 810,00
R 113 602,00
(MUT) and
52% (WITS) of
the NSFAS cap JOHANNESBURG
PRETORIA
R 24 929,00
R 37 900,00
R 24 854,00
R 33 200,00
R 4 756,00
R 28 800,00
R 3 225,00 R 57 764,00
R 99 900,00
the FCS
RHODES R 38 950,00 R 1 650,00 R 49 300,00 R 5 000,00 R 94 900,00
FCS used as a projection of DURBAN R 27 635,05 R 21 615,25 R 22 320,00 R 9 600,00 R 81 170,30
the following year’s likely 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
** Average
FCS of 12
academic cost for the 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
universities
allocation formula and the 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
above NSFAS
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
calculation of the NSFAS cap.
capped amount – a STELLENBOSCH R 39 235,00 R 32 755,00 R 15 000,00 R 86 990,00
In 2015, cap
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
“calculated estimate of what 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 was R71 800.
it will cost a student to study 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
at university for one year” – KWAZULU NATAL R 31 710,91 R 23 265,00 R 17 500,00 R 5 000,00 R 77 475,91
expanded over time to CENTRAL R 19 502,93 R 858,00 R 18 020,00 R 18 000,00 R 5 000,00 R 61 380,93
*** allowance
include wider range of costs VAAL R 20 238,00 R 870,00 R 20 611,00 R 22 300,00 R 4 000,00 R 68 019,00
costs
Once funding decision 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
recommended
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
made, FCS is used to refer by NSFAS but
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
to the cost of study inclusive WALTER SISULU R 20 220,00 R 23 498,00 R 10 000,00 R 2 000,00 R 55 718,00
determined at
of actual fee account university
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
charges and allowances discretion
UNISA R 13 350,00 R 5 000,00 R 18 350,00
NSFAS has data as far back SPU R 24 125,97 R 23 500,00 R 3 973,33 R 6 716,67 R 58 315,97
as 2005 on these estimates. 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
Accessibility Transparency Affordability Reliability Authenticity
Allocations formula – the basis of NSFAS’
funding of universities
Full cost of study
(FSC)
HEIs
Tuition
Residence
Allowances
‘Circles’ of influence
Racial breakdown
Allocation (and of students – FTE
allocation enrolment
NSFAS
formula) for the - Disadvantaged HEMIS
previous year + student index
MTEF grant (DSI)
FCS DSI (weighting based on race)
DISADVANTAGED STUDENT
INDEX
Helping students build a brighter tomorrow
Apportionment
Factor (AF) applied
to the MTEF grant
X
= DSCI
DISADVANTAGED
=
STUDENT COST INDEX
(notional value)NSFAS’ means test Differentiating between those who are able to pay and those that can’t
NSFAS Actof56 of
Purpose
means test1999
Helping students build a brighter tomorrow
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
* For all means-test waived students, EFC = R0
threshold of R400 000 (2016)Means test – Calculating EFC and award size
Estimated Disposable income
Total net income = gross Expected family contribution
= total net income – (minus) cost-
family income – (minus) tax as (EFC) = disposable income x
of-living (subsistence allowance
per the income tax rates for 0.33 (one tertiary level student)
for family, dependent on
individuals (updated OR 0.20 (two/more tertiary level
number of household members
annually) students)
AND where the family lives)Means test – Calculating EFC and award size
Disposable income = total net
Total net income = gross family Expected family contribution (EFC)
income – (minus) cost-of-living
income – (minus) tax as per the = disposable income x 0.33 (one
(subsistence allowance for family,
income tax rates for individuals tertiary level student) OR 0.20
dependent on number of household
(updated annually) (two/more tertiary level students)
members AND where the family lives)
Full cost of study Non-NSFAS
(as per individual bursaries or NSFAS loan
Expected family
student fee account, scholarships
contribution (EFC) or bursary
incl. allowances, where awarded to the
payable*) student awarded
* Learning materials allowance (incl. laptops, books, art equipment, Labcoats, etc.), meals where not
provided, private accommodation where applicable,Accessibility Transparency Affordability Reliability Authenticity
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
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.
25Overview of funding to Universities and TVETs Mapping the funding to universities and TVET colleges in the last few years
2016 Academic Year - Funding Allocations
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
Source: NSFAS Strategic Plan 2016/17-2019/20
Total R14.922bn
2016 - Mid-term budget: Funding Allocation
Additional R9,2bn made available for student funding – over the MTEF Period. 27Accessibility Transparency Affordability Reliability Authenticity
University
Allocations 2016
R12,6bn 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 continueAccessibility Transparency Affordability Reliability Authenticity
TVET bursary
programme
Introduced in 2007
Only funding for the
NCV and Report 191 Bursary covers the
20% student own
programmes (both contribution to
tuition
highest NQF level = 4)
DHET makes
Purpose: Attract young allocation to each
learners into vocational college on the
basis of enrolment
education and training for Report 191 and
NCV
Approx. 33-35% of
Programme costs
students in these are approved by
programmes are funded the DHET annually
ito funding norms
by NSFASAccessibility Transparency Affordability Reliability Authenticity
TVET bursary TVET Colleges 2016 Allocations
programme R2,3bn
Report 191
National Curriculum
Vocational (NCV)
No longer two
allocations per TVET –
single allocation for
both programmes of
fundingUniversity vs TVET funding
Year # university Value of funding Year # of TVET Value of funding
students college students
2009 135 202 R 2 818 220 032 2009 55 173 R 312 666 821
2010 148 387 R3 343 530 674 2010 61 707 R317 998 191
2011 216 874 R4 833 866 379 2011 114 968 R1 116 590 548
2012 194 504 R5 871 489 880 2012 188 182 R 1 822 497 265
2013 194 923 R6 729 069 970 2013 220 978 R 1 953 253 361
2014 186 150 R 6 969 940 822 2014 228 642 R1 991 487 809
2015 178 961 R 7 194 618 509 2015 235 988 R 2 095 129 942What NSFAS funds? Supporting students to access funding that will contribute to the human resource development needs of the Country
Accessibility Transparency Affordability Reliability Authenticity
NSFAS loan
product ‘typology’ 40/60 convertible loans
Funding from the DHET – 40/60 Annual reconciliation of individual student academic performance.
loans Up to 40% of the loan amount converted to a bursary.
Funding from the DHET – 100/0
loans (final year)
Institution Loans
40/60
100% (no conversion) 100/0 convertible loans
Other loan funding
NGO-programmes On graduation:
(40/60) Full loan value of final year of study converted to grant.
SAICA/Thuthuka
EC and KZN Premier’s
Office (40/60)
Outlier – Bursary to Loan
conversion (for students
who default on their work
100% non-convertible loans
back commitments) No portion of the loan is converted to a grant.
33Discounting NSFAS loans – the “hidden grant”
Interest levied at 80% of the repo rate – for the life of the loan
INTEREST RATE 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
INTEREST HOLIDAY 12 months interest holiday following exit from university – graduation or drop-
out
LOAN TO BURSARY Depending on academic performance, up to 40% converted to a loan at the
end of financial year
CONVERSION
Annual adjustment to the loan value
Unutilised funds on the student fee account (tuition payment to university)
CREDIT BALANCES
and on allowances (sBux) annually credited to loan account as ‘repayment’
34Accessibility Transparency Affordability Reliability Authenticity
NSFAS bursary
products for Government Gazette 2014
scarce skills Top 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)
Funding from the DHET –
for Students with Disabilities
Funding from the NSF – for
Scarce Skills as per an Scarce Skills (as per NSF)*
agreed list
BCM: Accounting, Financial Management, Actuarial Studies, Auditing,
Funding from the NSF – for Bus Man, Economics, Financial Accounting;
postgraduate study
Funding from the DBE – for SET: Physics, Comp Sc, Chemistry, Geology, Info Systems,
Mathematical Sciences, Agric, Stats, Biotech, Engineering;
initial teacher education
(Funza Lushaka)
Funding from the DSD – for
social work Postgraduate Studies
Funding from the SETAs – Only Honours programmes, no BTechs (exceptions).
for each of their identified
scarce skills Masters where funding available or special programmes.
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) 35Background to • #FeesMustFall campaign Presidential Task
the Historic Team (PTT) to determine nature and extent of the
funding challenges
Debt Funding
• 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 R2,039bnHistoric Debt
Unfunded Underfunded
Historic debt is costs which have
been charged to the student fee
account for tuition and residence those who had a loan
Unfunded is a NSFAS-
for the academic years 2013, award that was top-
eligible student not
2014 and 2015, and which have sliced,
funded as there were
not been paid to date. OR those who added
no NSFAS funds
remaining (EFC too This debt has resulted in the courses or costs after
high) student being financially their NSFAS contract
excluded from the university or had been signed, and
not being able to access results no funds available
or a graduation certificate
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
Online
Application Results
to Students
Universities
Fax/Email Processing
Loans & &
Bursary
Operations TVET’s
Posted 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 studentsStudent-centred allowance payment system - sBux
Helping students build a brighter tomorrow
Student registers
and has signed
LAFSOP
Students receive Money for
allowances in a form of a voucher
Student checks Allowances pocket for students
Student provides voucher
voucher number by
number to merchant
dialling *134*176# and
will see R50 is
available for books
sBux
Merchant enters
number into POS Voucher is checked
Merchant receives confirmation of the
(till) (is number valid?
successful transaction and the student
sufficient funds?)
receives a new voucher for the change.
and merchant account is credited124 385 student
accounts since
February 2014
4 991 427 transactions
to date
(Q2 802 913)
sBux
spend 3 413
2016 merchant
outlets in total
R 778 95 116 spent to
R 816 829 203 disbursed date in 4 categories
to date (Q2 99 539 049)
(Q2 85 132 076)Measuring impact Using different mechanisms to track the success of the Scheme in student funding and producing graduates
* 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.
Performance
Academic pass
information - rate. Drop-out.
Universities From 1996 to 2015, While it is estimated that
30-40% of students
average courses
passed rate was drop-out in the first year
76,6%*. 76,6% 53% of study, data shows
53% never graduate
Student Completion.
25,2% 55% of students (SU study)
retention.
Based on DHET
55% received qualifications within
9 years, most in N+1, with
data, only 8 only 38% drop-out (2000
universities have less cohort)
than a 15% drop-out
rate at the end of first
year**. National
average 25,2%
** These include UCT, UP, UKZN, NWU, Rhodes, UL, SUN and WITSKey Findings - Throughput
Throughput is a
Helping students build a brighter tomorrow
# of students who enter higher # of students who complete their
education qualification
factor of :
# of students who progress through
… in regulation time (N)
higher education
• 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.2017 Academic Year Preparation for the 2017 academic year, progress to date and the plans in place
University results
Flight Plan Returning Students
1/09/2016
1st Entrants Applications Open
15/12/2016
TVET results
22/12/2016
Umalusi
1/8/2016
NSFAS Solution Build Results
6/1/2017
Jan Mar May Jul Sep Nov 2017 2017
Today
Sector Engagements VC/ CFO engagements Registrars 7/10/2016
Registrars Working
FAO/ SRC Group
Registrars Including Pilot
Working Institutions
Group
Disability Group
Engagement
• 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 placeReporting to stakeholders April 2017
Monitoring drawdown on funds to March
Key activity Planning for the 2018 implementation 2018
milestones Target
migration to
January to
the “SCM”
November
January 2017
January
to
Generation of LAFSOPs, to March
March Disbursement of funds –
signing and appeals 2017 2017 Tuition to university (quarterly)
Cycle 1 Allowances to students via
sBux (monthly)
Assessment of applications
received – both online and January and
paper-based February
2017 Ranking and provisional funding
Registration – actual costs
1 September to
31 December
2016
Countdown
1 August to to application
30 closing date
Application open window 48
November
Create MyNSFAS accountApplication Status Update
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)
Accessibility Transparency Affordability Reliability Authenticity2017 and beyond …..
………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 chainBecoming more
Helping students build a brighter tomorrow
situated within the
post-school sectorQUESTIONS
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