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

2. University Education

3. 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

4. UNIVERSITIES

5. 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 R 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, R billion in 2019/20 and R 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 R 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

6. National Student Financial Aid Scheme
Allocations
2018/19
(R’000)
2019/20
2020/21 (R’000)
University: Bursaries
Additional allocation: Unfunded continuing and new students
Additional allocation: Unfunded university students from the 2016 academic year
Universities: Free higher education and training for the poor and working class
Universities subtotal
TVET College Bursaries*
Administration cost
TOTAL
Confidential

7. 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 R per annum in 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
NT /19 MTEF allocation for carry through
Total funds available for the 2018 academic year
Confidential

8. Technical Vocational Education and Training

9. Matters for Discussion
Upfront Payments
Bursary Administration Risks
Intervention Measures
Confidential

10. Upfront Payments
The upfront payment was calculated at 15% of the 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

11. 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

12. 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

13. Siyabonga