1. BUILDING A SUSTAINABLE FINANCIAL AID SCHEME

2. 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

3. 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.

4. NATIONAL STRUCTURE

5. BUILDING A SUSTAINABLE FINANCIAL AID SCHEME TYPE OF SCHEME … in a nutshell 4 NSFAS is an income contingent loan and bursary scheme. 4 The initial award is a 100% loan. For 2004 there is a minimum of R2 000 and a maximum of R25 000 4 Interest accrues on loans at approximately 2% real rate of interest. For 2004 the interest rate is 7% 4 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.

6. 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.

7. BUILDING A SUSTAINABLE FINANCIAL AID SCHEME MODES OF OPERATION … in a nutshell 4 Financial Aid Offices: 4 invite application; 4 NSFAS M eans Test and assess academic potential of applicants … (money goes to the poorest most academically able students); 4 determine the size of the award;

8. BUILDING A SUSTAINABLE FINANCIAL AID SCHEME MODES OF OPERATION … in a nutshell 4 Financial Aid Offices: 4 ensure that the loan agreement forms are completed correctly; 4 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.

9. 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.

10. AWARD VALUE 1991 - 2004 BUILDING A SUSTAINABLE FINANCIAL AID SCHEME

11. AWARDS GRANTED 1991 - 2003 BUILDING A SUSTAINABLE FINANCIAL AID SCHEME YEARTOTAL 1991 7 240 199214 161 199320 811 199428 260 199543 876 199672 788 199770 574 199875 764 199975 346 2000 82 069 2001 93 532 200299 949 2003 110 000 (est)

12. AVERAGE AWARD SIZE : 1991 - 2003 BUILDING A SUSTAINABLE FINANCIAL AID SCHEME

13. TOTAL AWARDS A total of 769 975 awards to 346 297 students BUILDING A SUSTAINABLE FINANCIAL AID SCHEME

14. SUCCESS RATES BUILDING A SUSTAINABLE FINANCIAL AID SCHEME Courses passed: 199672.6% 199775.3% 199876.1% 199974.1% 200075.2% 200172.5% 200273.1%

15. REINJECTION OF RECOVERED MONEY BUILDING A SUSTAINABLE FINANCIAL AID SCHEME 1999R 18 million 2000R 24 million 2001R175 million 2002R150 million 2003R211 million 2004R223 million

16. BUILDING A SUSTAINABLE FINANCIAL AID SCHEME HOW ARE COSTS KEPT LOW? Financial efficiency is the key to the overall design of the NSFAS modes of operation The administrative cost is approximately 1.8% of total expenditure

17. BUILDING A SUSTAINABLE FINANCIAL AID SCHEME HOW ARE COSTS KEPT S0 LOW? NSFAS is systems intensive rather than labour intensive

18. CORPORATE GOVERNANCE Internal Audit NSFAS Management Audit Committee BUILDING A SUSTAINABLE FINANCIAL AID SCHEME

19. CORPORATE GOVERNANCE cont. Finance Committee NSFAS Board BUILDING A SUSTAINABLE FINANCIAL AID SCHEME

20. CORPORATE GOVERNANCE cont. Minister of Education National Treasury BUILDING A SUSTAINABLE FINANCIAL AID SCHEME

21. Areas for Future Development BUILDING A SUSTAINABLE FINANCIAL AID SCHEME Closer collaboration with SARS Development of Bursary administration section Improved electronic communication with HEIs

22. Areas for Future Development … continued BUILDING A SUSTAINABLE FINANCIAL AID SCHEME Explore options to provide incentives for study in scarce skills areas Ensure better compliance with NSFAS requirements at institutional level Obtain financial support from South African private sector