Chairperson, hon Minister of Higher Education Comrade Blade Nzimande, hon Minister of Basic Education Comrade Angie Motshekga, hon members - all protocol observed - this Vote is critical in ensuring continued assistance to disadvantaged students. For decades the disadvantaged faced exclusion from getting a tertiary education owing to a lack of access and funds. The ANC recognises education as a fundamental human right and, in this regard, has created a vehicle for disadvantaged students to gain access to higher education.
The ANC Polokwane conference took the decision that free education should be progressively introduced for all the poor up to undergraduate level. Previously, the responsibility was on higher education institutions to raise funds to support students that were financially disadvantaged. Sources were, commonly, local and international donors and, in addition, institutions allocated part of their general operating budgets to finance student aid.
The National Student Financial Aid Scheme has maintained very high administrative standards and is confident of its future sustainability, underpinned by two important factors vis--vis government showing the political will to ensure that the scheme is adequately funded, and students that have demonstrated their academic ability and a willingness to repay.
The NSFAS is not without challenges, some of which are: enormous backlogs in access to higher education, requests for increased funding, expectations that transformation will bring higher education within everyone's reach, and tension between students and higher education institutions' administrations.
Whilst the budget has increased, it has not kept pace with the increasing demand for assistance. The NSFAS would have to triple its budget to meet even the current demand. Funds managed by the NSFAS have increased substantially, from R441 million in 1999 to R2,375 billion in 2008. This provided financial aid to 17% of higher education students.
All stakeholders applaud the considerable growth in the allocation of funds by government, but the demand for increased investment in student financial aid must be seen in relation to the growing inequality in South Africa, an extremely high rate of unemployment and the skills shortage. In 2009, South Africa was rated the most unequal society in the world. This is not surprising, given our history and our highly racialised society in which millions were disempowered and, therefore, disadvantaged.
The available funding for higher and further education and training does not cater for the estimated 2,8 million young people between the ages of 18 and 24 who are not employed. The new policy framework envisages progressing towards the realisation of the constitutional right of access to education by providing free higher and further education to disadvantaged students from poor and working class communities.
The ANC-led government is doing all this because it understands the urgent need to produce graduates who are well rounded, skilled and competent, graduates who can be creative and adaptive to the new challenges.
The provision of loans at a lower rate of interest than that of commercial educational loans offers students an affordable loan with favourable repayment terms. Linked to this is the incentive, based on academic performance, that the National Student Financial Aid Scheme can convert up to 40% of a loan to a bursary.
Painful to report is that 72% of students have not completed their studies. The White Paper warned in 1997 of poor students gaining access to higher education, but being unable to complete their studies and returning to the vicious cycle of poverty.
The review committee's finding that the allocation formula to universities is inappropriate is a step in the right direction. The formula recognises race as a proxy for socioeconomic need, but that the individual's socioeconomic status should remain the criterion. Therefore, a historically advantaged institution with affluent black students will not get the same NSFAS allocation as that of a historically disadvantaged institution with poor black students, provided that they qualify for the funding. The ANC supports the budget. [Time expired.] [Applause.]