DA express doubts over Nzimande’s new R3.8bn ‘missing middle’ funding model

The DA is unfazed by the higher education's R3.8 billion new NSFAS funding model to finance the'missing middle. Picture : Simone Kley

The DA is unfazed by the higher education's R3.8 billion new NSFAS funding model to finance the'missing middle. Picture : Simone Kley

Published Jan 16, 2024


Cape Town - The DA is not excited by the Higher Education Department’s new R3.8 billion National Student Financial Aid Scheme (NSFAS) funding model to finance the “missing middle”, saying it’s too early to be excited over it.

Higher Education Minister Blade Nzimande said the issue of the “missing middle” students who struggle to get funding from NSFAS will soon be a thing of the past as he announced the implementation of the first phase of the Comprehensive Student Funding Model.

The fund will see the funding of students who come from families who have a total income of more than R350 000 but not more than R600 000 per annum.

Nzimande said this loan scheme would be administered by NSFAS, which has the legal mandate to offer student loans as per Section 4 of the NSFAS Act 1999.

“Between 2019 and 2022, NSFAS has disbursed R123bn, distributed across 2 918 624 beneficiaries.

“As an administrator, NSFAS will deliver on front-end services, that is, user interface, and, where appropriate, will partner with public or private financial institutions, as well as universities with experience in running student loan schemes, to provide backend support and other services,” said Nzimande.

During the first phase, the government has committed an initial capitalisation fund of R3.8bn to support the loan scheme in 2024.

“This amount comprises R1.5bn from the National Skills Fund (NSF) and R2.3bn from Sector Education and Training Authorities (Setas). This amount will fund 47% of the missing middle school students, that is, 31 884 of the estimated 68 446 missing middle school students.”

The DA said Nzimande’s announcement of his missing middle funding model is nothing but a blatant attempt to steer attention away from himself and the NSFAS board chairperson and left out tangible information such as the date of implementation and repayment terms and conditions.

“The fact of the matter is that NSFAS’s financial sustainability will not be solved by limiting income contingent loans to just the missing middle.

“Fee-free higher education is unsustainable, and with university grants also being cut, higher education institutions are being left in a precarious situation that will continue to exclude the missing middle from accessing higher education,” said Chantel King, the DA’s spokesperson on higher education.

She said: “Before we get excited about the R3.8bn funding for 47% of the missing middle, the devil lies in the details. Any credible announcement should entail: Percentage interest on the loan; when repayment will commence; who will be responsible for administering the loan system considering the NSFAS board’s fixation on outsourcing NSFAS operations? When will the loan system commence? How much is earmarked for the ICT upgrade, and who will be contracted to implement this, considering R119 million has already been spent to upgrade the system, and the National Treasury’s correspondence on the seed funding increase over 10 years (and) considering the economic outlook of the country?”

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Cape Argus