Ikusasa Student Financial Aid Programme (ISFAP)

1 IkusasaStudent Financial Aid Programme (ISFAP) Ministerial Task Team Report on a Support and Funding Model for Poor and Missing Middle studentsAccelerate Cape Town9 May 2017 AgendaMinisterial Task Team (MTT) How will it work? Funding Cost ImplicationsFrequently Asked QuestionsJan -Feb 2017 Student Roadshows2 Ministerial Task Team (MTT)Jan -Feb 2017 Student Roadshows3 Ministerial Task Team (MTT) Making higher education progressively available and accessible through:CollaborationTransparencyFeedbac k & ConsultationWhat Success Looks Like Reducing the high dropout rates of poor and working class students in the higher education and training sector, Improving the employability of the funded graduates, Improving the skills profile of the country, Improving the partnership between government, the private sector and higher education institutions in supporting very poor, poor and missing middle students .

2 Jan -Feb 2017 Student Roadshows5 Background 2010 Ministerial Committee on Review of NSFAS 2013 Working Group Report on free University Education for the Poor in south africa ; recommended a policy dialogue model to determine parameters 2015 Presidential Task Team Report -recommended a reviewed funding model for poor and missing middle students be developed and tested in the 2017 academic year, for full implementation in 2018 if practical Ministerial Task Team (MTT) established on 13 April 2016 to develop a support and funding model for poor and missing middle students MTT chaired by SizweNxasanaChairperson of NSFASJan -Feb 2017 Student Roadshows6 The Constitution of the Republic of south AfricaEducation rights are contained in Section 29 of the Constitution of the Republic of south africa , section 29(1) which states that: Everyone has the right -(a) to basic education, including adult basic education; and (b) to further education, which the state, through reasonable measures, must make progressively available and accessible.

3 Basic education is a fundamental right, while further education (especially higher education and technical and vocational education and training) must be made progressively available and accessible. Jan -Feb 2017 Student Roadshows7 Our Mandate Determine and advise on alternative financing and operating modelsfor funding very poor and missing middle students Consider relevant legislation, public policy findings and recommendations of Presidential and Ministerial Task Teams, reports and guidelines. Funding of occupations in high demand. Create an efficient and robust model. The Minister also appointed a Reference Groupto interrogate the findings all relevant stakeholders included; replaced the policy dialogueJan -Feb 2017 Student Roadshows8 Our WorkstreamsSeven Workstreamsmade up of: Impact Bond (SIB) PilotConsultation with business Business Leadership south africa (BLSA) Business Unity south africa (BUSA)Jan -Feb 2017 Student Roadshows9 Ministerial Reference Group1.

4 Student Organisations south African Union of students (SAUS) (attended) south African students Council (Sasco) (attended) Pan Africanist Student Movement of Azania (PASMA) Democratic Alliance Student Organisation (attended once) EFF Student Command (did not attend) south African Further Education and Training Student Association (did not attend) 2. Higher Education Institutions bodies Financial Aid Practitioners of south africa The Universities Council Chairs Forum (UCCF-SA); Universities SA (USAf)Jan -Feb 2017 Student Roadshows10 Ministerial Reference Government departments and agencies Department of Higher Education and Training Department of Finance/National Treasury Department of Planning, Monitoring and Evaluation Department of Trade and Industry National Student Financial Aid Scheme (NSFAS) Sector and Education and Training Authorities (SETAs) south African Revenue Service (SARS) The Broad-Based Black Economic Empowerment Commission The Council on Higher Education (CHE)Jan -Feb 2017 Student Roadshows11 Key Strategic Objectives of the Model3.

5 Align the skills promoted by the model with the NDP and Human Resources Development Council Strategy Fast track south africa s skills production for the 21stcentury Incentivise all stakeholders (government, students , universities, TVET colleges and private sector) to focus on producing skills and occupations in high demand (OHD)4. Reduce the dropout rates of poor students Provide sufficient funding to poor and missing middle students to cover the full cost of study at universities Provide comprehensive psychosocial and life skills support for all students funded13 IkusasaStudent Financial Aid Programme (ISFAP).Key Strategic Objectives of the Model5.

6 Improve skin in the game in the future of south africa for all Create a shared and common vision for education in south Shared responsibility for funding students in higher education and training Leverage funding from various sources including the private and public sector to effectively fund students at universities and TVET colleges14 IkusasaStudent Financial Aid Programme (ISFAP).Governance & Operating StructureJan -Feb 2017 Student Roadshows14 Minister specifies governance structure and rules and criteriaPPP AgreementGovernanceHow will it work?Jan -Feb 2017 Student Roadshows15 Loan and grant decision matrix (illustrative for a 3 year Programme )Jan -Feb 2017 Student Roadshows16 EFCG rantEFCG rantGrantEFCG rantGrantGrantGrantVery Poor 1stYear2ndYear3rdYear4thYearExpected Family Contribution (EFC) increases by household means GrantGrantGrantPoor Lower missing middleUpper missing middleLoans according to higher loan repayment (due to drop out) plus household means LoanBalance to cover full cost of study provided in form of income contingent deferred payment facilityHow will it work?

7 Very Poor StudentsJan -Feb 2017 Student Roadshows17R108,000R100,000R116,640R 62, 985R 62, 985R 0R 0R 0R 62, 985R0R 62, 985R324,640R387, 625 Employment & Min SalaryOversight & adminVerification of students & informationAdmin systems & processesContinuous monitoring, preventative action, remedial steps, Student supportStudent SupportJan -Feb 201718 All funded studentsUniversityAccommodationStudent PaymentsUniversity feesBooksMealsStipendOther SupportAcademic support:Tutorial supportAcademic developmentExtended ProgrammesManaged social support Life skills trainingMentoringFirst Year ExperienceMedical support Psycho-social SupportJan -Feb 2017 Student Roadshows19 Funding cost ImplicationsFunding Cost ImplicationsFUNDING COST IMPLICATIONS -2018 Income band< 150k< 300k< 450k< 600kNumber of students funded (cumulative)209,907334,761397,187501,232 % university population (cumulative)30%45% cost (R'bn)(cumulative)1928,933,842 Possible Funding AvailableFrequently asked questionsJan -Feb 2017 Student Roadshows22 What is the difference between the new ISFAP and NSFAS?

8 The proposed ISFAP model is a complete overhaul of the current higher education funding system that is new proposed ISFAP model is a partnership between government, NSFAS and the private sector. Jan -Feb 2017 Student Roadshows23 Lending ProgrammeNSFASISFAPF unding Philosophy Loans first converted to partial grant based on academic performance Grant system reducing with increasing household incomePoor students Income below R122000 Income below R600000 (including missing middle )Funding Government Public/Private sector (incl. NGOs, DFIs, etc)Debt management Government funded Privately/Public managedPromotion of scarce skills / Employability Limited focus More focus, better incentives for students , universities.

9 Private sectorSummary of the Funding Policy ChangesLending ProgrammeNSFASISFAPLoan versus bursary ratio 100% Loanto all NSFAS qualifying students 40% converted to bursary if Student passes 100% of finalyear funding converted to bursary if Student pass Effectively 60% grant 40% loan on completion Verypoor students receive fully subsidised funding for the minimum qualification time Poor and missing middle split between grants/bursariesand options for funding the balance which includes ISFAP loans. Higher proportion of grant in year 1 and 2 of of the Funding Policy ChangesR200 million targeted for 2 000 missing middle students (based on R100 million -1000 students from 1styear to completion)UniversitiesMedical doctorsPharmacistsActuariesEngineersChar tered AccountantsProsthetists/Physiotherapists Technical (Artisans)Humanities (selected majors)

10 UniversityofVenda4020 Walter Sisulu University2020 University of the Witwatersrand1002012050 University of Cape Town10020100 UniversityofPretoria10020100100 TshwaneUniversityofTechnology50 UniversityofKwaZulu-Natal502010 ORBITTVET50 Total3702060320140605090 Any Student funded will be supported through to the conclusion of their studies37 IkusasaStudent Financial Aid Programme (ISFAP).Where Are We Now Raised R140m for the pilot at 7 universities MTT Report and Pilot presented to Cabinet on 2 November Comprehensive feasibility study with National Treasury Regulations for setting up a Public Private Partnership project is underway MTT Report published for public comment closing 15 May 2017 Final model to be decided by government based on outcomes of Pilot, feasibility study, public comments and outcomes of the Presidential CommissionJan -Feb 2017 Student Roadshows27 QuestionsJan -Feb 2017 Student Roadshows28