PRESENTATION ON THE NATIONAL STUDENT FINANCIAL AID SCHEME (NSFAS) IN

1. PRESENTATION ON THE NATIONAL STUDENT FINANCIAL AID SCHEME (NSFAS) IN FURTHER EDUCATION AND TRAINING COLLEGES Presentation to the Portfolio Committee on Higher Education and Training 19 June 2013

2. Process of Determining Bursary Allocations Per College • Bursary allocation for 2013 was R1.988 billion compared to R1.764 billion in 2012 • Bursary allocations were based on available funding, programme costs and student enrolments • From July to September of each academic year, the Department leads colleges on an annual strategic planning exercise on the basis of which colleges set performance targets and provide their projections for student enrolments for the upcoming academic year • Department determines the provisional bursary allocation for the upcoming year based on CPIX-adjusted cost of Ministerial approved programmes and the projected student enrolments for each College. This information is communicated to Colleges by the end of the academic year • In February of the new academic year, colleges submit their actual FTE enrolment figures to the Department, which are then used to determine the final bursary allocation per college

3. 2013 Enrolments and Impact on Final Bursary Allocations • The national Full-Time Equivalent (FTE) enrolment projections that Colleges provided for 2013 were 263 722 students while the actual national FTE enrolment in 2013 was 314 807. This represents a difference of 16%, i.e. 51 085 • Increased student enrolment figures have had a significant impact on the bursary allocation at 22 FET Colleges where the final allocations were lower than the provisional allocations that were issued to Colleges in December 2012

4. FET Colleges with Increased Final Allocations in 2013 • It must also be noted that the final bursary allocations at 28 Colleges were higher than the provisional allocations. The 28 FET Colleges that had their allocations increased were:

5. Implications of Increased Enrolments on Bursaries • The Colleges’ provisional bursary allocations differ from the final bursary allocations largely due to the following: • Actual student enrolments in NC(V) and/or Report 191 programme • Programme type in which the students are enrolled is a major determinant of the value of the bursary allocation, i.e. the programmes and qualifications mix per college has an impact on the number of students that are likely to receive funding • In terms of the enrolment projections that colleges had provided in 2012 for the 2013 academic year, 8.3% (i.e. R507 009 977) of the total bursary allocation had been allocated to the travel and accommodation allowances. In light of the much higher final student enrolments in 2013, however, only 3.8% (R 277 143 440) of the bursary allocation was available to cater for the travel and accommodation needs of students

6. FET Colleges and the Administration of the Bursary Scheme • At the introduction of the Bursary Scheme in 2007, the FET College Bursary Scheme Guidelines were developed • Bursary Guidelines are reviewed annually and circulated to Colleges • Followed by an annual bursary managers workshop is convened at which the revised Guidelines, as well as the revised NSFAS Means Test, are workshopped with College Bursary Managers. • The Guidelines outlines the broad principles, institutional arrangements and procedural requirements: • Establishment of a Financial Aid Committee (FAC) and Financial Aid Appeals Committee consisting of representatives of Management and the SRC • Application of the NSFAS Means Test to ascertain student financial eligibility for the bursary • Guidelines on the academic pre-requisites • Required documents that students must submit together with their application forms for financial aid

7. FET Colleges and the Administration of the Bursary Scheme • The following are some of the challenges: • - Poor financial management of and controls • - Insufficient and inadequately qualified staff • - Failure to apply the qualifying criteria • - Poor communication about the eligibility criteria • - None compliance with the requirements for the establishment of proper financial aid governance structures • Many Colleges have over-estimated their need for additional funds, for example: • - Umgungundlovu FET College: Non-application of Means Test and academic merit criteria; no Financial Aid Committee; re-processing of financial aid applications revealed that all student applications were incomplete with no supporting documentation • - Lovedale FET College: Out of a total of 283 first-year student bursary applications received, only 61 were eligible for financial aid using the eligibility criteria on these applications

8. College Requests for Additional Funds • To date, 27 FET Colleges have indicated a bursary shortfall of R 470 million • Colleges are reflected in the tables below:

9. College Requests for Additional Funds

10. Administration of the Bursary Scheme • Given the scenario outlined in slide number 7, the purported shortfall is questionable • In the manner undertaken at Umgungundlovu and Lovedale FET Colleges, the Department will embark on a process of bursary applications verification to ascertain that proper bursary processes have been followed and only eligible students have been awarded bursaries • Entail enlisting the services of qualified auditors to review bursary applications and procedures for awarding bursaries • In addition, close monitoring of the DHET-SAICA Bursary Management Improvement Manual will be undertaken to ensure institutional compliance and alignment between financial aid processes and broader College financial management • DHET will embark on a media and stakeholder engagement campaign to raise public awareness about the Bursary Scheme, student eligibility criteria, and the required documentation to support financial aid application forms

11. Thank You