DEPARTMENT OF HIGHER EDUCATION AND TRAINING Briefing on the allocation of funds to Universities and TVET Colleges in 2018 28 February 2018 Confidential

University Education

OVERVIEW OF THE 2018/19 BUDGET AND 2018 MTEF ESTIMATES The National Treasury submitted a revised MTEF allocation letter allocating additional funds for subsidies to universities and TVET colleges; and bursaries to students at universities and TVET colleges through NSFAS. The table below provides a breakdown of the R57 billion additional allocations announced over the medium term. R million 2018/19 2019/20 2020/21 MTEF Universities: zero per cent fee increase for 2018 and subsidy funding 2 445 4 050 4 814 11 309 Universities: NSFAS student funding 4 581 8 124 10 315 23 020 TVET colleges: subsidy funding 1 414 2 222 3 014 6 650 TVET colleges: NSFAS student funding 2 585 3 735 3 996 10 316 TVET colleges: infrastructure 1 300 1 484 1 647 4 431 NSFAS: administration 30 35 40 105 Operationalisation of new TVET colleges, examination services and pension payments   675 712 1 387 Total 12 355 20 325 24 538 57 218 Confidential

UNIVERSITIES

UNIVERSITIES Confidential Additional funding was allocated for increasing university subsidies to 1% of the GDP over a period of time, R2 445 billion in 2018/19, R4 050 billion in 2019/20 and R4 814 billion in 2020/21, giving a total of R11 309 billion over the MTEF period; The additional allocation for earmarked grants are mainly for operational costs for the 3 new developing universities, University of Mpumalanga, Sol Plaatje University and Sefako Makgatho Univeristy, and the Clinical Training Grant to support the growth in clinical training for health professionals, especially for doctors and nurses; Additional funding was allocated for increasing bursaries for new FTENs into undergraduate studies at public higher education institutions over the MTEF period, R4 581 billion in 2018/19, R13 124 billion in 2019/20 and R15 315 billion in 2020/21, giving a additional total of R33 billion over the MTEF period. The allocations through NSFAS have increased from R9 849 billion in 2017/18 to R35 321 billion in 2020/21. In the Budget Review documents, the allocation reflects R67 billion because there was already a provisional R10 billion allocation to Department in the 2017 (R5 billion was provisionally allocated for 2019/20 and R5 billion for 2020/21 to NSFAS). When the IMC approved the R57 billion announced, it excluded this amount as it was already allocated in the 2017 MTEF Confidential

National Student Financial Aid Scheme Allocations 2018/19 (R’000) 2019/20 2020/21 (R’000) University: Bursaries 4 790 216 10 899 922 12 920 909 Additional allocation: Unfunded continuing and new students 3 012 571   Additional allocation: Unfunded university students from the 2016 academic year 2 517 158 Universities: Free higher education and training for the poor and working class 4 581 324 13 124 030 15 315 380 Universities subtotal 14 901 269 24 023 952 28 236 289 TVET College Bursaries* 5 164 002 6 517 926 6 778 628 Administration cost 269 120 287 596 306 489 TOTAL 20 334 391 30 829 474 35 321 406 Confidential

2018 Fee Adjustment Grant As in 2017, government will pay a fee increase capped at 8% for all qualifying registered university students with a gross combined family income up to R600 000 per annum in 2018. The allocation available for the 2018 academic year amounts to R4 174 billion as follows. Summary R NSF - Remainder funds from the 2017/18 financial year 1 556 257 207.38 NT - 2018/19 MTEF allocation for carry through 2 617 988 000.00 Total funds available for the 2018 academic year 4 174 245 207.38 Confidential

Technical Vocational Education and Training

Matters for Discussion Upfront Payments Bursary Administration Risks Intervention Measures Confidential

Upfront Payments The upfront payment was calculated at 15% of the 2017 allocation of TVET Colleges The 2018 upfront payment was disbursed to Colleges during January of 2018 From the upfront amount received TVET Colleges are required to utilise 40% of the upfront amount towards the tuition fees of funded students 60% of the upfront amount is utilised towards funding the allowances of funded students Additional upfront amounts relating to the 2018 allocation will not be disbursed by NSFAS. Confidential

Bursary Administration Risks Ripple effect of the 2017 backlog which could negatively impact on utilisation of the 2018 funding Capacity of NSFAS to process a high volume of applications as a result of the increase in the combined household annual income threshold Delayed capturing of student applications at the start of the 2018 academic year Delays in contracting of students Non-responsiveness of NSFAS to College queries Late issuing of remittance lists Confidential

Interventions Measures DHET/Task team to address utilisation challenges Quarterly engagements with DHET Regional officials Capacity building workshops for Financial Aid Practitioners and SRCs Development of the manual on implementation of the student-centred system Development of frequently asked questions for students Confidential

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