building a sustainable financial aid scheme
DESCRIPTION
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME. THE NSFAS MISSION. BUILDING A SUSTAINABLE FINANCIAL AID SCHEME. - PowerPoint PPT PresentationTRANSCRIPT
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BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
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THE NSFAS MISSION
NSFAS seeks to impact on South Africa’s historically skewed student, diplomate
and graduate populations … by providing a sustainable financial aid
system which enables poor but academically able students to meet their
own and South Africa’s development needs.
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
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1991 : The Tertiary Education Fund of South Africa (TEFSA) formed.
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
BACKGROUND
1995 : TEFSA asked to administer the National Student Financial Aid Scheme.
1999 : The National Student Financial Aid Scheme Act of 1999 passed by parliament.2000: TEFSA becomes NSFAS.
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NATIONAL STRUCTURE
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BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
TYPE OF SCHEME … in a nutshell
NSFAS is an income contingent loan and bursary scheme.
The initial award is a 100% loan. For 2004 there is a minimum of R2 000 and a maximum of R25 000 Interest accrues on loans at approximately 2% real rate of interest. For 2004 the interest rate is 7% up to 40% of the loan is converted into a bursary … where the extent of the conversion is determined by the student’s academic results.
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BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
MODES OF OPERATION … in a nutshell NSFAS allocates funding to institutions.
The Allocation formula is informed by the number of students, general need of students and cost of
study at the respective institutions.
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BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
MODES OF OPERATION … in a nutshell Financial Aid Offices:
invite application;
NSFAS Means Test and assess academic potential of applicants … (money goes to the poorest most
academically able students);
determine the size of the award;
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BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
MODES OF OPERATION … in a nutshell Financial Aid Offices:
ensure that the loan agreement forms are completed correctly;
send batches of forms with interim reports to NSFAS claiming money on behalf of the students.
NSFAS processes the claims and makes payment.
Financial Aid Offices credit student fee accounts.
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BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
MODES OF OPERATION … in a nutshell All students receive statements 4 times a year.
Loans are income contingent and recoverable at salary source once a loanee is employed.
NSFAS tracks debtors to their places of employment via the South African Revenue Services.
Recovered money is re-injected into the Scheme.
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AWARD VALUE 1991 - 2004
R 0R 100R 200R 300R 400R 500R 600R 700R 800R 900
(MIL
LION
)
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
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AWARDS GRANTED 1991 - 2003
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
YEAR TOTAL1991 7 2401992 14 1611993 20 8111994 28 2601995 43 8761996 72 7881997 70 5741998 75 7641999 75 3462000 82 0692001 93 5322002 99 9492003 110 000 (est)
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AVERAGE AWARD SIZE : 1991 - 2003
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
R 0R 1,000R 2,000R 3,000R 4,000R 5,000R 6,000R 7,000R 8,000R 9,000
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
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TOTAL AWARDS
A total of
769 975 awards
to 346 297 students
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
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SUCCESS RATES
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
Courses passed:1996 72.6%1997 75.3%1998 76.1%1999 74.1%2000 75.2%2001 72.5%2002 73.1%
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REINJECTION OF RECOVERED MONEY
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
1999 R 18 million2000 R 24 million2001 R175 million2002 R150 million2003 R211 million2004 R223 million
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BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
HOW ARE COSTS KEPT LOW?
Financial efficiencyis the key
to the overall design of the NSFAS modes of operation
The administrative cost is approximately 1.8% of total
expenditure
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BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
HOW ARE COSTS KEPT S0 LOW?
NSFAS issystems intensive
rather than labour intensive
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CORPORATE GOVERNANCE
Internal Audit
NSFAS Management
Audit Committee
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
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CORPORATE GOVERNANCE cont.
Finance Committee
NSFAS Board
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
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CORPORATE GOVERNANCE cont.
Minister of Education
National Treasury
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Areas for Future Development
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
•Closer collaboration with SARS•Development of Bursary administration section•Improved electronic communication with HEIs
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Areas for Future Development … continued
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
•Explore options to provide incentives for study in scarce skills areas•Ensure better compliance with NSFAS requirements at institutional level•Obtain financial support from South African private sector