Higher Education Minister Blade Nzimande has appointed Professor Lourens Van Staden as acting chairperson of the National Student Financial Aid Scheme (NSFAS). Nzimande made the announcement in Pretoria on Sunday, 14 January 2023, as he briefed the media on the implementation of the first phase of the Comprehensive Student Funding Model.

NSFAS chairperson Ernest Khosa has taken a 30-day leave of absence while the board investigates allegations that he defrauded the institution by taking kickbacks from service providers.

The allegations were levelled by the Organisation Undoing Tax Abuse (Outa), which also linked Nzimande to the alleged kickbacks. Khosa and Nzimande have both denied they took kickbacks.

Van Staden is a former vice-chancellor of Tshwane University of Technology and in 2022 was appointed as administrator of the troubled Mangosuthu University of Technology in KwaZulu-Natal.

NSFAS has been embroiled in controversy over the past year following its move to appoint service providers to disburse funds directly to students. CEO Andile Nongogo was fired in October following investigations into claims he had a conflict of interest in appointing the service providers. 

Read more in Daily Maverick: How NSFAS tapes knocked Blade Nzimande against the ropes

On Sunday, Nzimande said Van Staden would oversee the appointment of a new CEO and “fully implement the Werksmans Report that was commissioned by NSFAS to look at corruption and other shenanigans that were taking place, especially the service providers who are providing allowances to students”.

He added that he “told the incoming chair to familiarise yourself with everything that needs to be done to make sure we start the academic year in the manner we need to start it”.

This was partly a response to questions from the media on how ongoing challenges of outstanding funds owed to universities and late payments to students of their allowances for food, accommodation and books will be averted this new academic year. 

Student groups have said tens of thousands of NSFAS beneficiaries are waiting for outstanding payments from 2023 and have threatened to protest unless the allegations of corruption and mismanagement are thoroughly investigated.

“I have raised this with the board; if Sassa is administering grants to 18 million South Africans, why should NSFAS have a problem in properly administering 1 million grants?” Nzimande said.

The minister also acknowledged that the scheme’s administrative capacity had not been properly funded.

“One student not paid an allowance is one too much,” he said.

Another concern raised is poor communication from the scheme to students. To deal with this, Nzimande said incoming head of communications Ishmael Mnisi would create a more effective communication strategy that would not leave students confused and in limbo. 

The missing middle 

The Department of Higher Education and Innovation, along with NSFAS, has agreed to increase funding for the 11% of South African households in the “missing middle”, those with an income of between R300,000 and R600,000 per year, who earn too much to qualify for NSFAS funding but struggle to pay for higher education.

The Comprehensive Student Funding Model that addresses the missing middle is an extension of the existing NSFAS scheme and will be rolled out in two phases. Phase one begins this year, 2024/2025, where R3.8-billion will be allocated to support the missing middle with loans to further their studies. Nzimande stated this would fund an estimated 47% of 68,000 students that fall in this category. 

Nzimande said the other half that would miss out on funding would have to take loans and pursue funding options already in place in universities across the country. 

“Further workshops will be held with the registrars of our institutions and student financial officers once NSFAS has obtained board approval for the funding guidelines.”

Nzimande made projections for phase two, which would proceed from 2025/26, where about R3.1-billion to R4.2-billion would be added annually to the scheme’s budget for over 10 years. The department would continually engage with public and private financial institutions to expand NSFAS.

While the final criteria for funding is still in works, Nzimande outlined a number of aspects:

• Students must be from a household that receives an income of between R350,000 and R600,000;
• Students studying in public colleges, Tvet colleges and public universities can qualify;
• Both undergraduate and postgraduate students will receive funding;
• Seventy per cent of funding will be allocated to students in science, technology, engineering and mathematics (Stem) programmes, which might be adjusted to include students studying towards qualifications in commerce or entrepreneurial programmes. Thirty per cent will be allocated to humanities programmes;
• All qualifying students must be willing to sign a loan agreement;
• Students can apply each year of study to continue to receive the loan, though conditions will apply; and
• Students must achieve a 60% average to receive the loan and continue receiving the loan. Students with a 70% or above average and who finish their course in the prescribed time will qualify for a 50% reduction of their loan on request.

‘Confused’

Karabo Khakhau, DA shadow minister of higher education, said: “This plan is expected to be rolled out by an entity that has failed to administer its current load effectively. So, how can we expect the rollout of this new plan to be any less of a mess?”

Khakhau said the DA’s alternative plan to fund the missing middle targets students from households with annual incomes of between R180,001 and 600,000 and offers tiered loans — 100% funding for those earning between R0 and R180,000; 66% for households earning between R180,001 and R350,000; and 33% for households earning between R350,001 and R600,000. 

“This tiered funding is missing in the minister’s plan. There is also no clarity on when he plans to roll this out. We’re still pretty confused as a nation about what funding looks like in 2024 because we still have 20,000 students who were defunded last year who may or may not register for this academic year,” Khakhau said in a written statement to Daily Maverick. 

The DA has called for Nzimande to resign and for President Cyril Ramaphosa to initiate an investigation into the allegations against him. DM