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
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.
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.
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.
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;
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.
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.
AWARD VALUE 1991 - 2004
R 0
R 100
R 200
R 300
R 400
R 500
R 600
R 700
R 800
R 900
(MIL
LIO
N)
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
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)
AVERAGE AWARD SIZE : 1991 - 2003
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
R 0
R 1,000
R 2,000
R 3,000
R 4,000
R 5,000
R 6,000
R 7,000
R 8,000
R 9,000
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
TOTAL AWARDS
A total of
769 975 awards
to 346 297 students
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
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%
REINJECTION OF RECOVERED MONEY
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
1999 R 18 million
2000 R 24 million
2001 R175 million
2002 R150 million
2003 R211 million
2004 R223 million
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
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
HOW ARE COSTS KEPT S0 LOW?
NSFAS issystems intensive
rather than labour intensive
CORPORATE GOVERNANCE
Internal Audit
NSFAS Management
Audit Committee
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
CORPORATE GOVERNANCE cont.
Finance Committee
NSFAS Board
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
CORPORATE GOVERNANCE cont.
Minister of Education
National Treasury
BUILDING A SUSTAINABLE FINANCIAL AID SCHEME
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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