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‘Missing middle’ scheme boost for NSFAS IT systems revival

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 16 Jan 2024
Higher education, science and innovation minister Dr Blade Nzimande. (Photography: Lesley Moyo)
Higher education, science and innovation minister Dr Blade Nzimande. (Photography: Lesley Moyo)

The National Student Financial Aid Scheme’s (NSFAS’s) ICT systems will be capacitated to meet the demands of administering funding to students in the missing middle.

This was the word of higher education, science and innovation minister Dr Blade Nzimande, outlining his department’s plans around funding the “missing middle”.

The missing middle is the category of students who come from families with a total income of more than R350 000, but not more than R600 000 per annum.

Nzimande and his department are working towards a new Comprehensive Student Funding Model that aims to introduce measures to support all the categories of students, including those currently not supported by the NSFAS bursary and funding policy.

The minister presented phase one of the funding model at the weekend, saying it seeks to ensure the missing middle students access financial support from government in a form of a loan to pursue their studies.

The loan scheme, said Nzimande, will be administered by NSFAS, which has the legal mandate to offer student loans as per the NSFAS Act.

As part of the implementation process of phase one, government has committed the initial capitalisation fund totalling R3.8 billion to support the loan scheme in 2024.

Additionally, it has also “committed funds to revive NSFAS ICT systems, including the loan system”.

“As an administrator, NSFAS will deliver on front-end services, that is user interface, and where appropriate will partner with public or private financial institutions as well as universities with experience in running student loan schemes, to provide backend support and other services.

“NSFAS will also use existing capacities in the universities to work and oversee the steady growth of capacity in the loan unit to service the scheme and grow the social impact bond in the short to long term.”

An entity of the Department of Higher Education and Training, NSFAS runs a close to R50 billion annual budget, which services young people from poor and working-class backgrounds.

Between 2019 and 2022, NSFAS is said to have disbursed R123 billion distributed across 2 918 624 beneficiaries.

However, over the years, the scheme has been plagued by numerous challenges, including IT system failures and mismanagement. More recently, it has been at odds with students on issues and allegations relating to its new direct-payment system, as well as defunding of students, non-responsive query system and accommodation accreditation backlogs.

Last year, NSFAS indicated it is taking measures to fortify its IT systems, after cyber criminals tried to gain unauthorised access to its payment infrastructure and that of its fintech partners.