National Student Financial Aid Scheme & Council for Higher Education Strategic and Annual Performance Plans, with Deputy Minister

Meeting report

Chairperson’s opening remarks

The Chairperson welcomed the Deputy Minister of Higher Education and Training, Mr Mduduzi Manana. The purpose of the meeting was to be briefed by the National Student Financial Aid Scheme (NSFAS) and Council of Higher Education (CHE) on their strategic plans and Annual Performance Plans (APPs)

National Student Financial Aid Scheme (NSFAS) Strategic Plan and Annual Performance Plan

Mr Msulwa Daca, Chief Executive Officer (CEO), NSFAS, reflected on the NSFAS journey from the year 1991 to the current period, highlighting successes and failures along the way. Notably, among the success over R50 billion had been disbursed since inception to approximately 1.5 million students; the shift from only disbursing loans to currently disbursing 59% bursaries and 41% loans; the transformation from the old to a new student model and higher than average increases in allocation from national fiscus.

In terms of lessons learnt, critical partnerships with universities, colleges and funders had to be fostered; communication with all stakeholders had to be improved and the creation of opportunities to provide strategic insights on the impact of public sector investment in education and its relevance to NDP goals.

NSFAS faced several challenges including the need to cater for students with historic debt; the inability of NSFAS to assist all students due to capacity and funding; unfunded programmes such as B. Tech; the implementation of the new student-centred model which would take at least three years; claims in excess of allocation; administrative capacity to pay all claims on time and report, and the reliance of NSFAS on universities and colleges for information.

Student-centred model

The student-centred model was introduced in 2015. Under this model, allocations would be managed by NSFAS. Students would know their funding status before registration andwould apply once only for a course of study. The model would affect about 15% of the student population. The model had been piloted at 11 Institutions which included 6 universities and 5 Technical Vocational Education and Training (TVET) colleges. The preparations for the roll-out of the programme included confirmation of allocations to universities which was completed by 19 December 2014. The 30% upfront payment to universities (on request) R697 Million; 10% upfront payment to all TVET colleges (20% in April 2015) R660 Million and dedicated funding for students with disabilities. Lastly, NSFAS had taken a different approach to media engagement and partnership with a greater focus on proactive media releases and responses to all media queries/requests.Both positive and negative media coverage had been received, as well as advertising value received. There had been a partnershipbetween the Department of Higher Education and Training (DHET) and Khetha Radio Campaign on the South African Broadcasting Corporation (SABC).

Strategic considerations

The key strategic considerations over the next five years revolved around the analysis of the existing data, that is, who was passing and who was not, along with the reasons why. Fundraising would be a major consideration in terms of focusing on good relations with current funders, helping those students who could not afford to pay, and private sector partnerships. Furthermore, there was a need to minimize financial leakages. One of the ways this could be addressed would be to centralize the decision-making within NSFAS which wascarried out in 75 different locations. This made it difficult to get decisions made as well as to monitor and evaluate effectively.

Strategic goals and objectives

Mr Lerato Rubushe, Chief Operations Officer (COO), NSFAS, outlined the two strategic outcome-oriented goals as follows: Goal 1 – an efficient and effective public entity in providing student financial aid and Goal 2 – increased access to higher education and improved student financial aid environment. The outcomes for Goal 1 were robust systems, processes and controls; effective and efficient governance structures; and productive and engaged employees. The outcomes for Goal 2 were increased funding; improved recoveries; financial support extended to more students; and improved stakeholder communications and relations. The assigned performance indicator for Goal 1 was that NSFAS received a clean audit report annually and for Goal 2 was increased total number of student loans and bursaries.

Mr Rubushethen discussed the strategic objectives and split them into Programme 1 and Programme 2. Programme 1 detailed the objectives for student-centred financial aid and Programme 2 detailed that of administration. In terms of programme 1, the first objective was to improve the disbursement of funds and allowances to students; second, to provide policy inputs on student financial aid; third, to improve key external stakeholder satisfaction; fourth, to improve loan collections; and fifth, to increase funding raised. For Programme 2, the sixth objective was to roll-out the new student centred model; seventhwas to improve governance; eighthwas to strive for a high performance culture and improved working environment; and lastly, to ensure information technology (IT) and organisational strategic alignment.

Strategic risks

In conclusion, the strategic risks includedthe number of deserving students far exceeding the available funding, which resulted in student protests. The timely disbursements of funds to students and institutions were a challenge, along with fundraising and low recoveries. The data received from institutions was often not up to standard. Attracting and retaining key ICT skills was difficult. It also took a long time for institutions to respond to NSFAS on submission of claims and data.

The Chairperson thanked the NSFAS delegation for their briefings and opened the floor for questions and discussion.

Discussion

Dr B Bozzoli (DA) opened up the discussion by pointing out that it did not seem as though the DHET was giving as much as it claimed to be giving. She said the recovery rate was definitely lower and wanted to know when exactly NSFAS became more of a bursary than a loaning organisation. What was the capacity of NSFAS in terms of the quality of staff to take over the administrative role of the universities and colleges?More funding was going into colleges despite the fact that universities had increased the number of enrolled students.

Mr Daca responded that the transition to a bursary organisation had not occurred overnight but that it had been a transition over years.

Dr Bozzoli requested clarity on how staff was rated.

Mr Rubushe responded that staff was rated out of 5. A rating of 3 was the minimum as it indicated competence and showed that one was doing their work. The rating of 1 meant that a worker should not even be in the organization and a rating of 5 showed that a person was excellent at their job. Therefore they thought that 3 should be the minimum to start off with the basics.

Mr N Khubisa (NFP) asked whether SETA would be transferring money or not, and if yes, how this money would be transferred? His understanding was that students already had a lot of paperwork to complete when signing up for NSFAS, which was cumbersome and difficult. Furthermore, students were asked to complete these forms and return them at allocated return dates despite the cumbersome nature. What was NSFAS doing or could it do to help this situation?

Mr Daca said this was part of the old model and definitely one of its problems. In the new model, students would apply once and they would just need to focus on passing their exams to guarantee funding for the following year. However, it would inevitably take some time to roll-out the new model due to its magnitude. The goal was to make sure the disruptions as they implemented the new model would not collapse the whole foundation.

Ms J Kilian (ANC) asked whether it was possible for NSFAS to phase in the new student centred model earlier. She asked this in light of the fact that NSFAS would be taking over the administration role that universities and colleges were doing in order to monitor implementation more effectively. If this could be achieved, NSFAS would essentially become masters of their own destiny.

Ms Kilian then requested an explanation of an anomaly in terms of the budget, citing slide 28 in the briefing that detailed expenditure and administration costs in 2014/15 which had been reduced. With regards to strategic objective 1, if 95% could be achieved surely 100% was attainable in the other years. Perhaps the targets had been set too low for new funders and other goals andNSFAS was aiming for the ‘low hanging fruit’. Lastly, she suggested acampaign or programme to show the effects of NSFAS by showcasing the success-stories of actual students in high-level government positions today.

Mr Daca reminded Members that a Department intervention had caused a temporary blip in the flow of numbers. Because of that intervention some of the numbers would be slightly off, which would explain the anomaly. Some of the figures being referred to regarding administrative costs were from a year or two ago, but that with new funding the goals would be possible. NSFAS tried to stretch itself as much as possible while at the same time being realistic in its goals. He gave the context in which they viewed the targets by outlining that when they spoke of funders, they were referring to those who give R10 million and above. Finding five of those funders each year was difficult. These factors explained the reasons for lower targets.

Mr Rubushe agreed that the targets they had achieved in the financial year 2014/15 were much higher than those set in the APP. The reason for this was the passing of time because the APP was being constructed in October of the previous year and that their projections were based on a different system. When the projections were made they were calculating it as the actual outcome that had been achieved plus 40% as a minimum and not the highest possible outcome (maximum).

Mr E Siwela (ANC) asked whether all the managers had signed performance agreements.

Mr Daca responded that NSFAS had a performance management system that ran from the executive level all the way to the bottom. They were actively trying to measure the motivation of staff and ensure that the levels are high because staff performance increases would filter the benefits throughout.

Mr Siwela was not satisfied with this response. He asked NSFAS representatives to please try to answer his question again.

Mr Baca responded that the performance agreements had been signed by all participants.

Mr Siwela asked how NSFAS planned to achieve their vision in the next five years.What criteria was being used to fund students? There were shortages in key fields of study such as medicine, but there were medical students that have been rejected for funding. How did NSFAS pick who was funded?

Mr Daca responded that NSFAS had many funders who were entitled to funding schemes that they deemed important and useful. There were funders and schemes within these funding pools that dictated where the money was allocated and thus which students could access them. However, there was a broader fund that NSFAS had set up which catered for general applications and therefore picked students from various faculties. In line with the same issue, at times Skills Education and Training Authorities (SETAs) tell you to find students and report to them, and that each SETA had different rules that they had to follow. However, NSFAS only handled the financial aspect of the partnerships.

Mr M Tshishonga (AGANG SA) asked whether it was possible to address the issue of low recovery using the people who had benefitted from NSFAS to motivate those who had succeeded before. People who had benefitted from NSFAS did not see the bigger picture when it came to recoveries. He asked if the NSFAS journey was part of the journey to free education.

Mr Daca responded that NSFAS was trying to use the capital they had to gain more traction and money. They wanted to be more forceful and use all the resources at their disposal. Therefore, NSFAS was planning to run an active campaign on the benefits and outcomes of recoveries to make this possible.

Mr Rubushe added that the root cause of low recoveries was the old model which had not built relationships with the students they had funded. It was purely transactional and the new model aimed to change that. In the new model students would provide their address and national identification numbers (ID) so that NSFAS could track them after their programme.

Ms S Mchunu (ANC) asked why the loan target had lowered significantly given the new recovery strategy.

Ms Kilian requested an explanation of the reduction in administration costs in Programme 1 compared to Programme 2 where there was a significant increase. This was in reference to the Appropriation Bill which allocated a specific amount which should reflect in the Programmes. This was a concern.

Mr Daca responded that the difference between the amount in the Appropriation Bill and the Programme was through funders that were charged fees by NSFAS which made up about R30 million of the budget. They funded NSFAS as a way of assisting them to administer the large amounts they were in charge of. 

Ms Kilian noted that bureaucracies hada tendency to expand but there was always a tremendous strain applied on the fiscus as a result. It was very important for everyone to learn to do more with less. Was the right type of system to help administer the new NSFAS role as administrators?Was NSFAS investing in a suitable system to make it possible to roll-out the new student model earlier than in three years?

Mr Daca responded that NSFAS was trying to build a state of the art system that could deliver across the country. He said capacity has been built in the ICT space because that is what they believe in for the future given technological advancements. However, the paper system is still available to accommodate everyone.

Ms Mchunu said the issue of up-front payment had not been answered, the one of requests for universities.

Mr Rubushe said in terms of the question on upfront payments said most colleges had cash flow problems at the beginning, so they decided to give them 10% straight up. However, most universities could finance themselves in that period. This was why they prioritised the colleges and used a request system with universities.

Ms Mchunu asked about the outsourcing of scanning services. Did NSFAS have enough capacity to administer SETA funding?

Mr Rubushe responded that the scanning tender was over a period of three years.

Mr Dumisani Mathonsi, Board Member, NSFAS, responded that from a processing point of view it was important that information would have gone through the service provider by the time it reached NSFAS in order to minimise handling of paper within the institution. It was a multi-year tender but it was also integrated into their system for efficiency and effective outcomes of loan applications.

Mr C Kekana (ANC) said the culture in South Africa was that debts had to be paid regardless of what kind it was. By law this was the general expectation that the debt was recovered as long as one had entered into an agreement. Would this contradict the free education intention they were moving towards? Was it possible to enter into an agreement to say if the students completed above R3000 or R5000, the employer could deduct it from their account? He was of the opinion that this would be more forceful rather than voluntarily. Was the budget on education in NSFAS still counting on the budget for the country?

Ms Kilian said that the website stated that NSFAS had good return rates after a student finished but unless people understood that the loan must be repaid was NSFAS not setting itself up for failure? It was very important that they be upfront with communication on these issues so that people did not find themselves in debt with bad credit records.

Mr Baca responded that NSFAS would review it and ensure that they did not create the wrong impression. However, the structure of the loan was that it was only repayable when you earn a minimum of R30, 000 per annum.

The Chairperson asked a question in reference to the compensation of employees on page 13 of the document. There was an escalation from R33 million to R55 million, as well as in the student operation financials which jumped from R43.2 million to R150 million. She asked if they could explain the increase in their budget activities. This was a large amount and the Committee would like to see more money spent on students which was the core mandate of NSFAS.

Mr Rubushe responded that the financial jumps were because of the new model which needed the allocation of more resources, for instance in the ICT and also around the loans and bursaries. The ICT model implementation model was the main reason for most of the escalation, the rest pertained to normal support services such as rent and housing.

Ms S Mchunu (ANC) said in the eyes of the students NSFAS was failing to fund them. What angle would their communication strategy take to convey a positive message about NSFAS to the country at large?

Closing Remarks by the Deputy Minister

The Deputy Minister addressed the question of funding of colleges and universities first and said the fact that there are more students in the university system than in the TVET system was an anomaly that they were trying to reverse. Not to downplay the importance of universities, but NSFAS wanted to get to a point where there were more students in the TVET system than in the universities. This was so that they could build a strong skills base which was lacking.

NSFAS remained a very important programme for the poor but it had not gone without its own challenges. The resources available were just not enough to cater for the demand or needs of students already in the system and those outside of the system. The Deputy Minister was glad that NSFAS was working on strategies to fix these issues especially in dialogue with parliament. He urged everyone to keep working hard to ensure these goals are met due to the importance of education.

The Chairperson thanked the Deputy Minister for these comments, and said there were a lot of positives highlighted in the APP that gave the Committee hope but that it would have to be maintained. NSFAS’s dedicated funding to students with disabilities was a progressive move. She commended them for their continuous engagement with potential sources of funding. She requested the next presentation by the Council of Higher Education (CHE)

Briefing by Council of Higher Education (CHE)

Dr Denyse Webbstock, Acting CEO, CHE, said challenges in the previous plan included capacity constraints, organisational weaknesses now mostly addressed, and undergraduate curriculum reform and quality enhancement project. The strategic plan for 2015-2050 mostly focused on enhancing policy analysis and information, managing the Higher Education Qualifications Framework (HEQSF) and standards in Higher Education quality and developing the quality assurance system further. There will also be a concerted effort to build intellectual capability and enabling organisational climate. The CHE believes that policy analysis is imperative to provide advice to the Ministry of Higher Education and Training (MHET) on request and proactively to be able to identify governance and management challenges in higher education. It is important to address key challenges arising from the review process.

Priorities in the state of higher education will focus on completing the existing projects, student governance and reflections on Academic Leadership. The role of placement mechanisms in higher education institutions will depend on new projects, student funding, academic staffing and Information Communication Technologies (ICTs) in higher education. The CHE will focus on managing the HEQSF and standards in higher education, including alignment of existing higher education programmes with the requirements of the HEQSF. Phase 3 of alignment will be on replacement programmes. The development and implementation, criteria and standards for the development and publication of qualifications will focus on the release of pilot standards for public comment, and extension of pilot standards development process to further qualification and conference of standards development. The CHE will also focus on maintaining a database of learner achievements in higher education and to submit the data to the National Learner Records Database (NLRD), which is submitted to South African Qualification Authority (SAQA). There will be ongoing submission of student enrolment and achievement data via Higher Education Quality Committee Information System (HEQCIS) to NLRD and systems development for monitoring trends.

Dr Webbstock took the Committee through other priorities in the strategic plan and these included:

• To audit the quality assurance mechanisms of higher education institutions.
• Ongoing assessment and approval of institutional improvement plans
• Further implementation of Quality Enhancement Project
• Academics as teachers
• Student support and development
• Learning environment
• Analysis of Institutional baseline data, workshops, second submissions
• Routine accreditation and re-accreditation processes, including site visits, usually in the region of 400 new programmes
• Increase number of site visits
• Expecting an increase of new programme applications – HEQSF
• Release of Report on the State of the Bachelor of Social Work
• Initiate national review of LL.B
• Identify further qualifications for national review

Mr Thulaganyo Mothusi, Chief Financial Officer (CFO), CHE, said the CHE together with National Treasury (NT) had cut the original budget allocation of CHE for 2015/16 by 7% and 10% by 2016/17 and no cut that had been implemented in the 2017/18 financial year. The CHE had been allocated R40.8 million for 2015/16 financial year and R40.9 million for 2016/17 and R47.9 million for 2017/18 financial year. The impact of budget cut means management will have to reprioritise and look at targeted projects in the APP against allocated budget as the budget of the organisation is mostly informed by projects. There will be monitoring of spending trends on a quarterly basis to see if expenditure is still within the allocated budget. The CHE is anticipating a rollover of funds from the current financial year after the completion and submission of financials in May 2015. This rollover will inform how the organisation will allocate funds based on pressing priorities that are not fully-funded because of budget cut.     

Discussion
Mr Kekana remarked that issues of the accreditation and quality are critically important and essential for the country to set a higher quality standard in higher education and to be competitive globally. The introduction of Growth Employment and Redistribution (GEAR), Accelerated and Shared Growth Initiative (ASGISA) and Joint Initiative for Priority Skills Acquisition (JIPSA) aimed to address the problem of lack of critical skills especially engineers. The country was producing 500 engineers a year instead of the targeted 1 000 and infrastructure like rail, road and ports is also important for driving economic growth. Is the country producing enough quality engineers? It was difficult to see engineers entering the industrial sector to be able to produce cheaper goods for the benefit of local people. It was commendable to hear about the project in rural areas where the community will be using mechanised toilets instead of those using water but this project should be expanded to other areas.

Mr Khubisa was mostly interested in how the development of a database of learner achievements in higher education that could be linked to the objectives of the National Development Plan (NDP), especially in the creation of employment opportunities and driving economic growth in the country.

Mr Siwela asked whether there was a way to ensure that teachers are well trained and accredited based on quality so that they could fit in the environment where they will be based after the completion of the courses. This is important, as it will have an impact on the output in basic education considering that the country already had a low pass rate in grade 12 in terms of students qualifying to enter tertiary institutions. 

Dr Bozzoli asked about the role of CHE in improving the quality of basic education in the country as it was indicated that basic education in the country was in a shocking state. What was the view of CHE on the standard of higher education in the country? It is important to also determine the role of CHE in advising the Minister of Higher Education in pushing standards in higher education. She expressed disappointment that CHE seemed to have lost its vigour and now mainly focused on writing papers and producing documents. Is quality enhancement done through system international benchmarking? It will be important for the Committee to get the copy of the 2 reviews on teacher education that had been done already and the contributors to the reviews.  

Ms Kilian asked for clarity on the extent to which the CHE could advise the DHE in directing NSFAS funding more towards scarce skills as identified in the NDP. There might be a typing error in figures on the amount invested on the collapsing of the 2 programmes.

Mr M Tshishonga (ANC) pointed out that CHE as regulator was aware of the bad perception of higher education in the country and some people complained that the old education system during apartheid was far better that the current one. It is important to know whether the CHE had tried to utilise the vast experience from retired professionals as had been done in countries like Japan.

Ms Mchunu asked what was happening to those qualifications such as Bachelor of Technology (BTech) that are not line with the HEQSF but are still offered by various tertiary institutions. 

Dr Webbstock responded that there is a whole complex issue in the production of enough engineers in the country. Even though the country had more students in higher education it was difficult to get the graduates. This needs to be linked to the persistent problem of high unemployment rate. She agreed with the Deputy Minister that the country needs to prioritise on skilled technologists in order for the country to experience higher economic growth. The responsibility to improve the quality of higher education is that of the institution and CHE could only offer advice on the criteria that could be used to improve the quality of higher education in the country. The programme on quality enhancement ensures that teachers are skilled and capacitated to be able to produce productive learners. There should be a proper plan to improve the quality of higher education especially in teaching education and social work. This should be followed by progress report to check whether the priorities of the plan had been achieved. 

Dr Webbstock responded that the development of a TVET sector would be able to determine whether the development of a database of learner achievements in higher education could be linked to the objectives of the NDP, especially in the creation of employment opportunities and driving economic growth in the country. This is important as it opens the doors to students who do not want to go to formal higher education. The CHE will now focus on doing accreditation in the public sector and will embark on site visits to check the quality of education offered and there is also a reaccreditation process. The situation in teacher education is indeed dire at the moment and this needs to be linked directly to the enhancement programme. The CHE was working very closely with Scotland as the country had a similar enhancement programme in higher education. The CHE was negotiating with the DHE and SAQA for the final date in which students will be enrolled in BTech, which will be 09 December 2017. This will be a lot of work for the universities of technology as it means they will have to redesign all the programmes offered.

Dr Webbstock responded that CHE had looked at the staff of temporary professionals in higher education. There is significant growth in the utilisation of retired professionals so as to improve the overall quality and also share the experience to those that are still coming in.

Dr Bozzoli commented it was interesting that the CHE was interested in the use of retired people as this was a good idea considering that Dr Blade Nzimande had previously remarked that the overview of higher education in the country was too old, too white and full of males but in the past he had also said there was a need to raise the retirement age in those involved in higher education.

Dr Webbstock responded that the DHE needs to have a programme on staffing the universities in order to get new people entering the teaching profession at higher education. Most universities had increased the retirement age from 60-65 years and others had even considered those who are beyond 65 years old as long as they are still productive. It is important to bring in “new blood” in higher education for the sustainability of universities and this “new blood” must be able to reflect on the society we find ourselves in. Part of the transformation of higher education is on who are producing new knowledge and who are teaching the students. The DHE will need to reflect on factors that are driving young people away from higher education to the private sector as this was more than just money earned but a societal issue as well. The CHE will vigorously focus on the alignment of what is happening in the institutions with the NDP in order to enhance productivity and the quality of the lives of South Africans. The accreditation process is important as it assists in looking at the overall purpose of accreditation towards locating the university sector as an engaged institution in society.

The Chairperson appreciated the presentations by both NSFAS and the CHE on their strategic plans and APPs. A lot of issues were raised about the state of higher education in the country, which showed that there were number of deep-rooted challenges that still needed to be addressed.

The meeting was adjourned.