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Nxasana: Proposed funding model could have unintended outcome for poor students

One of the recommendations made by the commission includes income contingency loans from commercial banks to replace the current Nsfas scheme.

FILE: Nsfas Chairperson Sizwe Nxasana (centre). Picture: EWN

JOHANNESBURG - National Student Financial Aid Scheme (Nsfas) chairman Sizwe Nxasana says that the proposed contingency loans to fund higher education in the country may have unintended consequences for poor students.

President Jacob Zuma finally released the Heher report which looked into the feasibility of free higher education this week.

One of the recommendations made by the commission includes income contingency loans from commercial banks to replace the current Nsfas scheme.

Nxasana says the proposed model may crowd out poor students.

“It can have unintended consequences in terms of achieving exactly the opposite outcome of crowding out poor students and having those that have work to do, benefit a lot from these loans.”

Read the report here.

President Jacob Zuma appointed the Heher Commission in 2016 following nationwide student protests under the banner ‘Fees Must Fall’.

The commission has been led by Judge Jonathan Heher.

Recently, students again protested, calling for the release of the report.

In October, a leaked copy of the report revealed that free higher education was not feasible.

At the time, some students campaigning for free education rejected the leaked commission report.

But the report posted on the Presidency's website on Monday is not any different to what was reported by newspapers.

The report does not suggest that free education for all is feasible.

It does, however, make several recommendations.

One recommendation is that all undergraduate and postgraduate students studying at tertiary education institutions, regardless of their family background, be funded through a 'cost-sharing model of government guaranteed income-contingency loans'. This will be sourced from commercial banks.

“Through this cost-sharing model, the commission recommends that commercial banks issue government guaranteed loans to the students that are payable by the student upon graduation and attainment of a specific income threshold. Should the student fail to reach the required income threshold, government bears the secondary liability,” the report reads.

For TVET colleges, the commission recommended all students receive fully subsidised free education in the form of grants that cover their full cost of study and that no student should be partially funded.

The commission has also recommended that government adopt an affordable plan to develop more student accommodation and that historically disadvantaged institutions be prioritised.

On the way forward, Zuma says two committees, led by Minister in the Presidency Jeff Radebe and Finance Minister Malusi Gigaba, are processing the report.

His spokesperson Bongani Ngqulunga says: “In a sense, there are only two main recommendations. The first is that funding to universities must be increased to 1% of the GDP. It recommends that TVET students be given free education. For university students it recommends that they be given loans from commercial banks.”

The president says he will make a pronouncement on the report once the ministers have concluded their work.

Meanwhile, the Presidency says it cannot say when the interministerial committee on education, set up to decide on the prospect of free higher education, will take a decision but it will act with urgency.

The committee, which will be headed by Radebe, will now have to deliberate on the recommendations and give advice to Zuma.

Ngqulunga adds: “I’m pretty sure that the committees that we’ve spoken about will work with the urgency that this matter deserves. What is really important is that government comes up with something that is sustainable and that it can address some of the problems that students have raised.”

It's feared that the report on the commission into free tertiary education could reignite student protests.

(Edited by Leeto M Khoza)

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