The Minister of Higher Education, Blade Nzimande, has confirmed that his Department along with NSFAS is looking into providing funding for missing middle students through an affordable loan scheme as this is a "funding crisis".
In a briefing with the Portfolio Committee, Nzimande stated that, "No one should be denied an affordable loan for higher education, irrespective of income." He said that he supports the notion to fund any student looking for funding and that the way things should be structured is that the more you earn, the more interest you will pay on the loan. This would also make funds available for later more vulnerable students.
By providing further funding opportunities, Government ais to imporove the success and graduation rates of poor and missing middle students and to also reduce drop out rates. The Minister said that it was found that students funded by NSFAS performed better academically and that providing funding would help with skills shortages in South Africa.
His Department has estimated that the potential cost of implementing this loan scheme would be between R37 billion and R67 billion per year, depending on the number of students funded that year.
They have also proposed where the money to fund these loans will come from. One way, the Minister said, could be to use public and private pension funds. However, DA's Shadow Minister of Higher Education, Belinda Bozzola, does not support this and has even gone as far as saying, "we will never be able to fund the missing middle".
Nzimande believes that through innovation, his Department will be able to come up with new ways to fund this initiative but will need the Government's support to make it work and to balance bad debts with funds.
The Department of Higher Education is also looking into providing funding solutions for postgraduate students.
They also plan to include the Ikusasa Student Financial Aid Programme (ISFAP), which provides funding for missing middle students but is not being utilised widely, in planning and the financial aid system.