State to offer R4.5bn to cover student financial aid scheme shortfall

December 18, 2015, 5:42pm

By Staff Writer, News24 on Business Day Live
Photo: STEPHANIE LLOYD/DAILY DISPATCH 

IN AN effort to avoid more student protests in 2016, the government will make more than R4.5bn available to the National Student Financial Aid Scheme to provide short-term debt relief to students, the Presidency said on Friday.

According to a report compiled by a task team appointed by President Jacob Zuma to investigate funding at universities, the scheme shortfall was R4.5bn.

“The report recommends that R2.5bn of this amount must be made available from the fiscus, in the form of loans to provide short-term debt relief to 71,753 students who were funded inadequately or were unable to access financial aid over the 2013 to 2015 academic years,” Mr Zuma said in a statement.

A further R2bn required for the 2016-17 financial year, to ensure that continuing students who were currently not receiving funding, would also come from the fiscus, he said.

The task team submitted its report to Mr Zuma on Tuesday. The report said a total of R6.8bn must be made available to plug a university funding shortfall triggered in part by the decision not to raise fees next year.

A commission to look into the viability of free education would also be announced soon, the Presidency said.

The task team has recommended a process to develop a “new financing model” that could help students from lower middle-income homes access tertiary education through unsecured loans.

This will no doubt add pressure to the fiscus.

Former finance minister Nhlanhla Nene said in the medium-term budget policy statement in October that no more money would go to universities this year.

In October, however, Mr Zuma announced a zero-percent fee increase in university tuition for 2016. The decision came after students across the country rallied behind a #FeesMustFall campaign. They had called for their student debt to be cleared, for no tuition fee increases, and for the African National Congress’s promise of free education to be realised in their lifetime.

While people had the right to protest in a democracy, students, their leaders, and other organisations should reject destruction of university property, Mr Zuma said.

Delivering his budget vote speech in Parliament in July, Higher Education Minister Blade Nzimande said the total funding available for loans and bursaries for the 2014 academic year was about R8.9bn. He said from 1991 to 2013, the scheme had assisted more than 1.4-million students and had assisted a further 430,000 students in the 2014 academic year.

Mr Nzimande also said at the time that the department’s allocation to the financial aid scheme for 2014-15 amounted to R6.1bn. This included R3.9bn for loans and bursaries to universities, R2.1bn for bursaries for Technical and Vocational Continuing Education and Training colleges (formerly Further Education and Training colleges) and R116.2m for administration.

News24 and Staff Writer