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NSFAS ’a casualty’ of Mboweni’s 2021 Budget

Higher Education, Science and Technology Minister Blade Nzimande. Picture: Tracey Adams/African News Agency (ANA) Archives

Higher Education, Science and Technology Minister Blade Nzimande. Picture: Tracey Adams/African News Agency (ANA) Archives

Published Feb 25, 2021


Johannesburg – The National Student Financial Aid Scheme (NSFAS) is set to be one of the casualties of the budget squeeze as the Department of Higher Education and Training finances will be cut by R24.6 billion.

This emerged from the National Treasury budget documents, which show slower growth in subsidies and grants to universities, TVET colleges and NSFAS would require a review of student enrolment growth and bursary allowances.

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“Institutions will need to contain costs, including staff numbers and salaries, and develop ways of using ICT more effectively to enhance blending learning.”

Finance Minister Tito Mboweni steered clear of the budget cuts in the Department of Higher Education and Training when he delivered his speech on Wednesday.

“Government remains committed to ensuring that deserving students are supported through higher education,” he said.

“The National Treasury is working with the Department of Higher Education and Training to work on policy and funding options that will be detailed in the MTBPS (medium term budget policy statement),” he said in reference to the adjustment later this year.

The Department of Higher Education and Training has been allocated R358bn over the medium term.

However, National Treasury budget documents said the Cabinet has approved reductions to the department’s baseline amounting to R24.6bn over the upcoming three financial years.

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This will consist of R19.6bn in transfers and subsidies R4.6bn in compensation of employees and R290.2m

“These reductions include R6.8bn on the allocation to the NSFAS for loans and bursaries, R5bn on university subsidies and R947.1m on TVET infrastructure grants.”

National Treasury said the reductions to university subsidies would likely lead to a decrease in the number of first year enrolment at universities.

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“Although this will have a longer impact on the number of new graduates emerging from the system, it is necessary to ensure that institutions remain sustainable and are able to offer quality education and is expected to be offset by improvement in the through-put rate at universities.

“Although a decrease in first year enrolments at universities and TVET colleges will begin to offset the reductions to the NSFAS, they will result in fewer students who enter higher education being able to access support in 2021.”

It stated that the public higher education sector would also need to consider revising its policy positions on supporting poor and working class students in higher education and training, including maximum allowances for accommodation, transport and food and halting funding for second qualifications.

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“Although the reduction to TVET college infrastructure grants could lead to delays in beginning new projects, it will ensure that funding is more closely aligned with the sector’s capacity to spend.”

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Political Bureau