In 2024, Higher Education Minister Blade Nzimande launched the Comprehensive Funding Model which will finally see missing middle students supported by the government through the provision of student loans.
Missing middle students refer to individuals who come from households with a combined income exceeding the threshold set by the National Student Financial Aid Scheme (NSFAS) of R350,000 and therefore do not qualify for NSFAS bursaries. Despite exceeding the household income threshold, missing middle students cannot afford the cost of higher education.
Since the funding for missing middle students was confirmed by NSFAS, little has been said about how the funding works. The only aspect of the loan that was clear was that the majority of the loans would be provided to students enrolled in Science, Technology, Engineering and Mathematics (STEM) programmes.
A consultative session was held on 26 March 2024 to discuss the NSFAS immunisation of the loans. The session was aimed at providing clarity on the Loan Scheme policy document and addressing institutional concerns.
Strategic Enablement Executive at NSFAS Vuyokazi Mafilika confirmed that NSFAS loans are aimed at the "missing middle" demographic, students whose annual household incomes are above the R350,000 NSFAS threshold for full bursaries, yet below R600,000.
Current Status Of NSFAS Loans For 2024
The application period for NSFAS student loans closed in February 2024. Questions were raised if NSFAS made funding decisions for these applicants as well as requests for the funding list to be made available to all institutions.
Mafilika assured stakeholders that they requested the NSFAS operations team to share a list of provisionally accepted students with institutions.
This will include those who meet the eligibility criteria and will indicate if any outstanding documentation is required.
If a student is provisionally funded, it means that they qualify based on the assessment that has already been done. However, two steps must be taken by students before they begin benefitting from NSFAS funding.
They explained that once NSFAS has received sufficient information to populate and send the pre-agreement form, the student will have to sign this pre-agreement form and acknowledge the conditions stipulated in it. This will allow us to proceed with the next step of obtaining full registration information from the institution.
Students who sign up for NSFAS missing middle loans and are approved by NSFAS are required to sign a loan agreement which will include a surety clause.
NSFAS will then generate a loan agreement form, and that is what the student will ultimately sign, and that’s where surety will be contained. Only after that step has been completed can we say with certainty that the student has been funded.
Mafilika says NSFAS anticipates it will begin funding missing middle school students in 2024 adding that the NSFAS operations team will be collaborating with institutions to expedite this process.
Various registration details are required from institutions, and the operations team will oversee the facilitation of all necessary information. I believe it’s imperative to schedule a discussion soon, regarding the Loan Scheme timeframes.
A stakeholder at the meeting expressed concern about the timing of implementing the Loan Scheme, particularly for undergraduate students who are already well into the academic year saying that "institutions are at full capacity". NSFAS opened loan applications and individuals had approximately one month to apply for student loans only.
Mafilika noted these concerns and said a possible extension on applications may be considered.
Additionally, I advocate for scheduling a meeting with our operations team as many of the questions raised today can best be addressed by them. They possess the expertise to offer clarity in this regard.
They explained that missing middle loans will only be available for new registrations and will not cover historical debt.
70% of the NSFAS loan scheme wile target STEM qualification while the remaining 30% is geared towards Humanities qualifications. Mafilika said the split was determined by the Department of Higher Education and Training (DHET) and not by NSFAS.
The 70/30 split arose because these qualifications offer a greater chance of students being employed, and ultimately, repaying the loan. In making this decision, the DHET had drawn from available institutional data.
They clarified that the loan repayment will be assessed based on the student's combined household income and there is no special condition requiring employed students to pay back immediately.
Allowances provided in the Loan Scheme will align with those offered in the bursary scheme. NSFAS allowances are distributed to students based on their circumstances and living arrangements while they study. Under NSFAS’ funding policy, allowances are set to be paid by services provided but this could change.
Mafilika said in the event of a student passing away during their studies, the loan will likely be written off by the accounting authority or the board.
Our current process will be that we propose that those loans be written off by the accounting authority or the board, but we are still consulting on this with our board and will provide clarity once we have received it.
The NSFAS loan will not only cover missing middle students, but it's also set to fund students enrolled in Postgraduate Studies.
Mafilika said the NSFAS loan scheme intends to cover all-encompassing postgraduate qualifications.
We are mindful and have been in conversation with the Department of Higher Education that we need to expand further for postgraduate students.
They acknowledged concerns around funding for postgraduate research-based qualifications and stated that as part of strengthening the policy document, NSFAS is expanding provisions for postgraduate funding and the requirements.
