1. Portfolio Committee on Education National Assembly
PRESENTATION TO
Portfolio Committee on Education
National Assembly
25 March 2008
By Mr. Pragasen Naicker
NSFAS CEO

2. NATIONAL STUDENT FINANCIAL AID SCHEME
NSFAS was established in 1999 as a public entity, under the Ministry of Education, by an act of Parliament (Act 56 of 1999) to provide for the granting of loans and bursaries to eligible students at public higher education institutions and for the administration of such loans and bursaries; and to provide for the recovery of loans.
The NSFAS Act has since been amended to include further education and training (FET) colleges.
Amendment gazetted in December 2007.

3. Building a Sustainable Financial Aid Scheme
MAIN FOCUS OF NSFAS
The main focus of NSFAS as contained in the preamble to the NSFAS Act is:
to redress past discrimination and ensure representivity and equal access;
to respond to the human resource development needs of the nation; and
to establish an expanded national student financial aid scheme that is affordable and sustainable.

4. Building a Sustainable Financial Aid Scheme
STRATEGIC GOALS
Goal 1: To provide access to public higher and further education for marginalised South African citizens who are academically able, in support of the country’s HRD strategy, while making a contribution to the alleviation of poverty.
Goal 2: To raise sufficient funding to enable NSFAS to realise its strategic goals.

5. Building a Sustainable Financial Aid Scheme
STRATEGIC GOALS
Goal 3: To develop a new allocations formula in line with higher education needs and transformation imperatives, for the equitable distribution of funds through allocating funding in an optimum manner.
Goal 4: To communicate NSFAS effectively to all its audiences, seeking to make NSFAS a funding channel
of choice.
Goal 5: To ensure the effective governance, management and administration of NSFAS.

6. Building a Sustainable Financial Aid Scheme
STRATEGIC GOALS
Goal 6: To provide effective and efficient Human Resource management and administration to ensure staff are competent to execute and support the NSFAS Strategy, and are managed in accordance with best current practices.
GOAL 7: To implement e-business strategies to enhance collaboration with higher education institutions, thereby increasing the efficiency of the Scheme.

7. EXPENDITURE SUMMARY Building a Sustainable Financial Aid Scheme
2007/08 expenditure not updated
Delete slide?
Building a Sustainable Financial Aid Scheme

8. CORE ALLOCATIONS 2008 (DE & DE (Teacher))
Eastern Cape R m 12%
Free State R m 6%
Gauteng R m 39%
KwaZulu Natal R m 20%
Limpopo R m 7%
Mpumalanga R m 0%
Northern Cape R m 0%
North West R m 4%
Western Cape R m 13%
Total R m
Percentage breakdown for 2007 and 2008 exactly the same
No public HEIs in Mpumalanga and Northern Cape
Adding Funza Lushaka does not change percentage spread materially
Building a Sustainable Financial Aid Scheme

9. KEY PARAMETERS Core Award Scheme
Building a Sustainable Financial Aid Scheme
KEY PARAMETERS
Core Award Scheme
Interest rate to be linked to Repo Rate as determined by the South African Reserve Bank and pegged at 80% of Repo.
Updated! 18/03/2008

10. EXPANDING THE SCHEME Bursaries available from 2007: 2007 2008 2009
Funza Lushaka R120m R180m R400m (Teachers)
FET colleges R100m R200m R300m
Social Work R 50m R105m R210m
UPDATED – included info on FET bursaries
Building a Sustainable Financial Aid Scheme

11. EXPANDING THE SCHEME … Public FET Colleges
The National Certificate (Vocational) is a new qualification at level 2, 3 and 4 of the NQF. The programmes include:
Civil Engineering and Building Construction
Electrical Infrastructure Construction
Engineering and Related Design
Finance, Economics and Accounting
Hospitality
Information Technology and Computer Science
Management
Marketing
Office Administration
Primary Agriculture
Tourism
These new programmes are intended to directly respond to the priority skills demands of the South African economy.
UPDATED – included info on FET bursaries
Building a Sustainable Financial Aid Scheme

12. FET R100 million allocated in 2007
Eastern Cape R 15.5m 16%
Free State R 7.5m 8%
Gauteng R 18.5m 19%
KwaZulu Natal R 18.5m 19%
Limpopo R 15.0m 15%
Mpumalanga R 7.0m 7%
Northern Cape R 3.0m 3%
North West R 5.5m 6%
Western Cape R 9.5m 10%
Total R100 m
Of 2007 R100 million, R67 million utilised as at 13 March
2008 allocations not yet available; should be in the same proportion as 2007
Building a Sustainable Financial Aid Scheme

13. EXPANDING THE SCHEME … Public FET College Bursaries
50 public FET colleges located in the 9 provinces
To date, of the R100m available for 2007:
R67 million has been paid to FET colleges
To assist 12,400 students (average bursary R5,400)
UPDATED – included info on FET bursaries
Building a Sustainable Financial Aid Scheme

14. RESULTS Building a Sustainable Financial Aid Scheme
* Final processing for 2007/08 year still in progress
Updated! 18/03/2008

15. RECOVERIES
Building a Sustainable Financial Aid Scheme

16. REINJECTION OF RECOVERED MONEY
2000
R24 million
2001
R175 million
2002
R150 million
2003
R211 million
2004
R263 million
2005
R280 million
2006
R305 million
2007
R341 million
2008
R392 million
2008 PROJECTION? R392 million
Building a Sustainable Financial Aid Scheme

17. RECOVERIES Year on year comparison
Building a Sustainable Financial Aid Scheme
RECOVERIES
Year on year comparison
Updated! 18/03/2008
NSFAS continues to implement improved loan recovery strategies resulting in improved collections

18. 2007/08 R39 million 2008/09 R48 million ADMINISTRATION Costs
Building a Sustainable Financial Aid Scheme
ADMINISTRATION Costs
2007/08 R39 million
(Total loans and bursaries R1.8 billion)
2008/09 R48 million
(Total loans and bursaries R2.1 billion)
Currently, the NSFAS cost ratio is slightly less than 2% of the total amount of funds it administers. In national and global terms this is regarded as a low cost operation.
The operational costs of Financial Aid offices at each university is the responsibility of the institution.
Department of Education contributes to administration expenditure; balance from interest on NSFAS recoveries.
Example: 2007 DE R17.6 million, NSFAS RR21.7 million;

19. Business Process Reengineering (started Feb 08)
AREAS OF FOCUS for 2008
Improve operational efficiency and systems at NSFAS to manage any increase in donor funding.
Business Process Reengineering (started Feb 08)
Further integration of Financial Information Systems (started Feb 08)
NSFAS Web based Services (Pilot starts in June 08)
Electronic Application and Means Test Form
Application for exemption from National Credit Act
Building a Sustainable Financial Aid Scheme

20. Communications and Development including fundraising
AREAS OF FOCUS for 2008
Communications and Development including fundraising
Current NGO partnerships:
Eastern Cape 10 Mpumalanga 1
Free State 0 Northern Cape 0
Gauteng 1 North West 0
KwaZulu Natal 5 Western Cape 2
Limpopo 4
Focus on under serviced areas particularly rural areas
Participation in university open days and country wide career exhibitions remains important
NSFAS will seek to actively increase its partnerships with Corporate SA
Building a Sustainable Financial Aid Scheme

21. Primary Aim for 2008
Given the importance of the NSFAS mandate in respect of South Africa’s national development goals, the organisation must be able to administer substantial increases in funding when the need arises. In 2008, NSFAS will make fundamental changes and improvements to its systems, processes and staffing capabilities so that it can administer increased funding speedily, efficiently and with the required level of auditing controls.
NSFAS will report to the next Portfolio Committee meeting on the outcome of the project referred to above.
Building a Sustainable Financial Aid Scheme