NSFAS & CHE Budget & Strategic Plan 2010/11; Minister on Findings of NSFAS Review Report

Meeting report

Council on Higher Education (CHE) governance issues and functions:  briefing
Professor Rolf Stumpf, Interim Chief Executive Officer, Council on Higher Education briefed the Committee on some of the governance issues of the Council on Higher Education (CHE) as well as its monitoring function and advisory function. He informed the Committee that Mr Ahmed Essop would fill the position of CEO from 1 May 2010.

The Higher Education Amendment Act of 2008, together with the National Qualification Framework (NQF) Act of 2008, made the CHE a Quality Council for higher education, which meant that the CHE was responsible for the accreditation of all higher education programmes. In terms of quality assurance in accreditation processes, there were a number of challenges experienced in the areas of self-accreditation, compliance with the Higher Education Qualifications Framework (HEQF), the re-accreditation of qualifications and creating criteria for the designation of qualifications.

There were also challenges experienced with quality assurance in terms of National Reviews on programmes. This led to the de-accreditation of a number of programmes. The CHE was still in the process of completing the Teacher Education Review. In terms of institutional audits, the CHE hoped to complete the first cycle of audits by 2011. This would mean that all public institutions would have undergone a comprehensive audit.

The CHE was also involved in quality promotion. CHE hoped to launch a project with the South African Union of Students Association, which would look at quality promotion and quality assurance. The CHE experienced challenges with the continued building of quality assurance capacity in the higher education system.

Mr Jan Beukes, Chief Financial Officer, CHE, informed the Committee that the CHE was a largely funded government entity. Last year the CHE's mandate was amended to include standard setting, and a once-off payment of R9 million was given to the organisation to set up the necessary structures. The Medium Term Expenditure Framework (MTEF) allocation was also revised and adjusted to show the increases in the CHE's budget. The Budget allocations for 2010/11 showed that 54% of the CHE's budget would be used for goods and services, 44% would be used for personnel costs and 2% would be allocated to capital expenditure.

The CHE's gender profile showed that there were more women that men employed at the CHE. However, there were very few women in senior management positions. The race profile showed that there were mostly black people employed at the CHE. However, there were mostly white people in the senior management and director positions.  

Discussion
Mr W James (DA) stated that he always wondered how one measured the quality of degrees and asked how those involved in quality of assurance would certify the quality of academic offerings within higher education institutions.

Mr Stumpf replied that this was a difficult question to answer. The South African Bureau of Standards (SABS) could set the minimum standards, but there could still be differences in particular products. The CHE, with its accreditation exercises and standard setting function, would now be able to set the minimum standards, criteria and laws that had to be satisfied by every single qualification offered in the country. There had to be a minimum comparability of qualifications across the whole education system. However, quality assurance would not guarantee that a qualification from one institution would be the same in another institution; it would just guarantee that both qualifications would satisfy the minimum requirements set by a body such as CHE.

Mr G Lekgetho (ANC) stated that he was shocked to find that students spent most of their time socialising. He wondered what CHE would do to address this problem. He asked CHE to provide details on what was meant by “post-schooling”.

Mr Stumpf replied that the Department of Higher Education and Training (DoHET) was looking at the problem of socialising in student residences. The DoHET was embarking on a project to make residences into areas of learning rather than boarding houses. Sometimes learners had to go to the library because residences were too noisy. He was happy that the DoHET was launching an investigation into the infrastructural requirements for residences.

Mr Stumpf answered that the issue of post-schooling presented the single greatest challenge to the Minister. There were 700 000 students who, according to the 2007 Community Survey, had the old N3 or Grade 12 certificate and could attend Higher Education Institutions (HEIs), but who were not working or studying. If high school dropouts were added to this figure, the numbers of young people who were not working or studying came to 2.8 million. It was ludicrous to expect universities to pick this up. In any case, fees at universities were too high. The country needed to find education facilities with low costs for these young people so they could fulfill their potential and be beneficial to society. The CHE was developing some views on the issues and the Minister was working on the matter as well. Further Education and Training (FET) facilities had to be capacitated and strengthened so they could play a much bigger role in resolving the matter.

Ms M Kubayi (ANC) addressed the quality assurance of short term programmes offered by institutions. She asked what role CHE played in quality assuring the programmes. She noted that CHE advised the Ministers on issues such as student support and success. She asked CHE to elaborate on this and to comment on student access to HEIs. 

Mr Stumpf replied that the CHE had delegated the duty of quality assurance for short term programmes to individual providers such as Wits University, provided they met the requirements for such delegation. If they did not meet the requirements then the quality assurance of short term programmes remained with the CHE.

In terms of access to HEIs, there was the National Benchmark Test and the introduction of the National Senior Certificate. There were problems of a systemic nature within the school system, which were not in the CHE's mandate. However, the CHE wanted to tell HEIs that the problem would not just go away. Universities had to shoulder a far greater responsibility around learning support. The CHE advised that the country's HEIs had to focus primarily on learning and learning support.

Ms Kubayi addressed the reply to the issue of quality assurance of short courses. She stated that it would be a challenge as HEIs would then be acting as players as well as referees when quality assuring their own courses. She worried that institutions would hide behind non-credible courses.  

The Chairperson asked for CHE's perspective of what HEIs’ role was in a developmental State.

Mr Stumpf answered that there did not seem to be a generally accepted notion of what particularly characterised a developmental state. Universities also wondered what it was. He thought the matter should be part of a national debate. His opinion was that whether there was unanimity or actual agreement on the issue, he did not think there was sufficient reason for a university to wait until the “developmental State” was defined before making its contribution. Education was one of the government’s priorities. It was important for all universities to investigate what the alignment was between their own learning programmes, research themes and community service programmes. Universities also had to ensure that they were aligned to developmental priorities. The CHE was also investigating the idea of completing an undergraduate degree in four years instead of three.

Mr A Mpontshane (IFP) commented that the concept of a developmental State was very interesting. However, the fact that it was not defined was very problematic.

The Chairperson noted that CHE had spoken about challenges that the HE sector faced. He wanted to know what advice it would give to improve the system.

Mr Stumpf answered that there were many issues that he hoped the new CEO and the Department of Higher Education and Training (DoHET) would resolve speedily. The CHE and the DoHET had to work together closely without jeopardising one another's independence and judicial mandate areas. The CHE had never approached the DoHET and asked for a list of issues on which the latter needed advice. Instead, it tended to wait for a letter from the Minister, or make its own decision as to its focus areas. However, CHE was confident that there would be better synergy between itself and the DoHET in the future. 

Ms N Vukuza (COPE) commented that a single, integrated system was needed for HEIs. At some point, an idea to merge universities and technikons was mentioned. She asked the CHE to comment on this. She also asked if there was a relationship between the HEIs and skills training.

Mr Stumpf answered that having a single integrated system was a challenge that the DoHET had to face. However, CHE and all the HEIs also had a role to play in the matter. All the role players needed a united agenda, which had to focus on the learners.

Ms N Gina (ANC) noted that some programmes offered by institutions were only “partially accredited”, yet they were still being offered to students. She asked the CHE to comment on this. She also asked how South African HEIs compared to HEIs in other African countries.

Mr Stumpf replied that with provisional accreditation, the CHE set a number of conditions. Some conditions had to be met prior to the commencement of the offering of the programme. Some programmes were allowed to be offered, on the understanding that they had to fulfill certain conditions within a given period. The CHE also asked institutions that did not achieve full accreditation to submit improvement plans. 

Mr Stumpf said that the South African HE system was by far the best on the continent.

Mr Radebe noted that there was an issue of transformation in some universities, in that they needed a balance of white lecturers and black lecturers.

Mr Stumpf replied that universities wanted to attract black lecturers. However, institutions world not be able to attract lecturers unless they were able to pay them more. Some universities even had an outflow of black lecturers because of low salaries.

Mr Radebe addressed the slide on gender profiles. He noted that more women were needed in CHE's senior management. He knew that CHE had problems recruiting black professionals. He asked what strategies the CHE was using to recruit more black people.

Mr Beukes replied that CHE had female senior managers, and would have brought them to the meeting, except that the timing did not allow it. CHE did not have a specific target as to the number of women it had to employ. However, the CHE was in the process of developing a plan that would clearly shape and state the entity's targets.

The Chairperson thanked the CHE, and requested information sheets from the entity that would focus on HE in the context of a developmental state. He also asked for plans on interventions that would resolve issues that were mentioned in the meeting.

National Student Financial Aid Scheme Review Report: Briefing by Minister of Higher Education
Hon Blade Nzimande, Minister of Higher Education, stated that there was a need to review the National Student Financial Aid Scheme (NSFAS) because its administrative capacity had not kept pace with the growth in the size of its funds. There were concerns about the number of blacklisted borrowers and there was a need to assess the short, medium and long term growth requirements of the Fund to increase access, particularly for poor students. The report on the review was released for public comment on 16 March 2010. There was a call for comments and a public participation process. Responses and recommendations would be brought to Cabinet by the end of August.

Not all universities allocated funds that were sufficient to cover the full cost of studying. Student debt at Higher Education Institutions (HEIs) was in excess of R2 billion, in addition to the loan book of NSFAS. In 2009, 316 320 (48%) students that had borrowed from NSFAS had dropped out without completing their studies. NSFAS had a 20-26% loan recovery rate.

The Review Committee found that the amount of NSFAS funding that was available fell short of demand. Under-funding contributed to the reasons students decided to drop out of college or universities. NSFAS's loan book was currently being reviewed in terms of the National Credit Act, and its value would be significantly reduced. The Review Committee also found that there was a strong need for a capacity and skills audit in order to determine the capacity of the current organisation and how it could be strengthened. NSFAS had to review its Further Education and Training bursary award system to eliminate inefficiencies.

The Review Committee recommended that NSFAS increase access to loans and bursaries. A comprehensive policy framework had to be developed to articulate the details of the national policy imperative of providing free higher and further education, with a focus on the poor. In terms of allocation of funds, it was recommended that all institutions should receive the average full cost of study per student, and all students qualifying for NSFAS loans had to receive the full cost of studying. NSFAS's loan book had to be in compliance with the National Credit Act.

The Review Committee also wanted to take some immediate action concerning NSFAS's loan book. It requested an audit of the R10 billion loan book, which would have to happen within this year. A technical task team would review the cost implications of the incremental roll out of fully subsidised undergraduate education for the financially needy.

In terms of administration and governance, a Human Resources (HR) expert from the Department of Higher Education and Training would be advising on the internal restructuring and policies of NSFAS. The Minister was also considering the appointment of a turn-around team to improve the administration in line with recommendations from the Review Committee.

Discussion
The Minister warned the Committee that he and the DoHET were not in any position to be questioned about the recommendations as they were still being discussed.

The Chairperson stated that the Minister would be protected. The presentation was quite comprehensive. He stated that the recommendations were still being discussed and the public would also be engaged on the matter later in the year.

Mr James stated that NSFAS had to look at the question of choice and creating opportunities for students. This meant that most of the money had to get into the hands of students. He addressed State supported education for those that could not afford to go to HEIs. This did not translate into free education, as the money had to come from somewhere. Taxpayer money was used for this very important purpose. He noted that colleges were just as important as universities. Most people saw colleges as second rate educational institutions. The government had to put more focus on colleges so they could become attractive avenues for education. He stated that students who could not afford to go to university should get full bursaries while students whose families could contribute should receive partial bursaries. In order to enhance student choice, there had to be an opportunity for students to directly access NSFAS bursary money. They should not have to go through the universities or colleges.

The Minister answered that State supported education and free education was the same thing, as education would be free for students anyway. It was inevitable that the government would have to look into the issue of fees as part of looking into the funding formula. This was why the report seemed to be biased towards universities. This did not mean that there would be more focus on universities. He said that although the presentation had spoken more about universities, colleges remained a priority. The issues about funding were more complex when it came to universities than colleges.

Ms Vukuza stated that she wished the Committee had been privy to NSFAS's review before the media had been told of it on the previous day. She was alarmed that the dropout rate was so high. She asked if students dropped out of college or university for purely financial reasons, or if there were other factors as well.

The Minister replied that university and college dropouts did not only occur because of financial reasons, even though this was a significant factor. The Minister was currently engaging with student movements to find out more information on the reasons that students dropped out.

Ms Kubayi agreed that it was important that the Committee hear important news such as NSFAS's review before the media did, as Members were placed in a disadvantage position. She thought that NSFAS should include recommendations made from the Review in its strategic plan. She hoped that NSFAS could produce the document as soon as possible and present it to the Committee. Many young people were being blacklisted because they could not find jobs after graduating. Fees seemed to block access to education. All the relevant stakeholders in the education sector had to ensure that students who entered university completed their studies. There were many socio-economic problems that still affected students.

The Minister replied that the relationship between the Ministry and the Portfolio Committee was a tricky one, which they would have to navigate as they moved forward. It was ideal, but not always practical, to involve the Committee at every stage. The Ministry, whilst taking the Committee seriously, recognised that not everything would be of interest to it, as an oversight committee. The media briefing held the day before should not be taken as a sign that the Ministry did not take the Committee seriously.

The Minister answered that it was important that the strategic plan had to reflect all the entity's objectives. However, the strategic plan was not a detailed implementation plan. There would always be new goals or plans that would arise that would not be in the strategic plan.

Mr Lekgetho commented that he also would prefer that the Committee was privy to important information before the Minister informed the public.

Mr Lekgetho noted that many students were being blacklisted and wondered how students that dropped out paid off their loans. There were even students who graduated and could not pay off their loans because they could not find employment straight away. He asked when the Minister would be taking the recommendations to the Minister and when the Committee would know about the Cabinet's decision.

The Chairperson added that the cut-off date for making a decision was August 2010.

Ms N Magazi (ANC) stated that she was aware that the Committee would have to hold hearings on the recommendations and issues contained in the presentation. She wondered if the Minister saw the Committee playing a role in finding solutions to NSFAS' problems.

The Chairperson stated that the Committee would have to support the issues raised by the Minister.

National Student Financial Aid Scheme (NSFAS) Strategic Plan and budget briefing
Mr Ashley Seymour, Chief Executive Officer, NSFAS, stated that NSFAS' goal was to provide student funding to academically deserving and financially needy learners so that they could pursue higher education. The total budget allocation for 2010/11 was R3 423 639. This would be allocated to loans and bursaries, as well as administration purposes.

He discussed NSFAS's strategic goals. The first goal was to expand the pool of funds available for disbursement as student loans and bursaries. NSFAS also wanted to maximise the recovery of outstanding loans due from debtors employed in both the formal and informal sectors of the economy. The second goal was to effectively manage the institutional utilisation of funds administered by NSFAS in any given year, and to intensify communication with Higher Education Institutions (HEIs) regarding reporting on utilisation of funds. The third goal was to strengthen internal efficiencies in the processing of student awards or claims, to ensure that funding would reach the target population. The restructuring within NSFAS operations would allow for a separate focus on the processing of loans and bursaries respectively. The fourth goal was to strengthen the quality of internal management and operations in line with changing funding patterns. This meant that NSFAS needed a high level of information technology, both internally and with all donors. It also had to ensure that NSFAS's human resources management and administration practices were in accordance with best practices. The fifth goal was to effectively communicate and manage the relationship with all NSFAS stakeholder groups and target audiences. The sixth goal was to undertake research that would inform the effective utilisation of available funds and served to advise the Minister on matters relating to student financial aid. NSFAS needed to build relationships with the higher education sector. It also needed to strengthen management information systems to assist with strategic planning and policy development.  

Discussion
Mr James asked NSFAS how it managed non-public funds. The Minister's Review Report recommended that NSFAS only manage public funds. He asked what NSFAS would recommend to strengthen its administration so that it could efficiently manage the funds, which had grown so quickly.

Mr Seymour replied that NSFAS received the FET responsibility a year or two ago and expected significant growth in the future. Because of this understanding, NSFAS acknowledged that it needed to overhaul its current infrastructure to be able to handle significantly larger volumes of cash. NSFAS also needed to be capacitated and this would have budgetary implications as well.

Mr Lekgetho asked NSFAS to elaborate on its staff complement.

Mr Seymour replied that there were 97 employees, of whom15 were temporary.

Ms Kubayi noted that strategic goals 4, 5 and 6 were directly affected by the Review of NSFAS.

The Chairperson stated that the Committee wanted NSFAS and the DoHET to meet so that there could be some form of coherence in implementing recommendations that would be made. This issue needed to be resolved urgently.

Prof Patrick Fitzgerald, Chairman of the Board, NSFAS, agreed with the Chairperson. NSFAS had an inkling of some of the recommendations that would be made. The Review was still going to undergo consultations and ultimately the NSFAS board would be informed by the shareholder as to which recommendations would be implemented. He agreed that NSFAS needed to be in closer contact with the Department and that NSFAS needed to consult with it more frequently. NSFAS would do its best to emphasise aspects that were beginning to converge with recommendations coming from the public policy process.

The Chairperson commented that there was a set of recommendations made by the Review Committee. These recommendations were still up for discussion. The DoHET, through the Ministry, said publicly that some recommendations had to be implemented for January 2011. He suggested that the DoHET and NSFAS hold a meeting to find out what steps they would follow to implement the recommendations that were publicly pronounced. The Committee would not be able to pass the Strategic Plan unless there was alignment between the Ministry, the DoHET and NSFAS.

Ms Kubayi proposed that the Committee should receive a report on the meeting and decisions that would be taken by NSFAS and the DoHET. The Committee needed this by Monday 22 March 2010, prior to the budget debate.

Mr Seymour clarified that the Committee wanted a report that would clarify the immediate actions that would be taken by NSFAS and the DoHET to implement some of the recommendations stemming from the review.

The Chairperson advised NSFAS to look at what the Minister was saying in the Review and at the meeting, and to proceed from there.

Prof Fitzgerald replied that this could be done.

The Chairperson reiterated his concern with the number of drop-outs in South Africa. He asked NSFAS to go to the various provinces during road shows to find college dropouts. He was aware that there was underspending on scarce skills, and suggested that NSFAS should be addressing this problem.

The meeting was adjourned.