Nzimande announces R3.8bn funding for ‘missing middle’ students

Monday, January 15, 2024

Higher Education, Science and Innovation Minister, Professor Blade Nzimande, has revealed that government has set aside a R3.8 billion initial capitalisation fund to support “missing middle” students.

The new Comprehensive Student Funding Model aims to support students including those currently not supported by the National Financial Aid Scheme (NSFAS) bursary and funding policy. 

This category of students is those who come from families who have a total income of more than R350 000, but not more than R600 000 per annum.

Nzimande, who was addressing the media on Sunday, revealed that the funding model is divided into two phases.

Phase one begins this year, 2024/2025, with the State committing the initial capitalisation fund totalling R3.8 billion to support the loan scheme. 

This amount comprises R1.5 billion from the National Skills Fund (NSF) and R2.3 billion from Sector Education and Training Authorities (SETAs). 

“This amount will fund 47% of the missing middle students, that is, 31 884 of the estimated 68 446 missing middle,” he said at the media briefing held in Pretoria. 

“We have also committed funds to revive NSFAS ICT [information and communications technology] systems, including the loan system.”

On implementing the scheme, he said his department has so far consulted with the National Treasury, university Vice-Chancellors and student leaders. 

“Further workshops will be held with the registrars and student financial officers once NSFAS has obtained Board approval for the funding guidelines.”

Second phase

Meanwhile, the department is working around the clock to implement the second phase of the funding model from next year to 2034.

“The department will ensure that the seed funding contribution by government is increased to R31.6 billion to R42.1 billion over 10 years. This is approximately R3.1 billion to R4.2 billion annually."

Criteria and expansion

“Together with the National Treasury, we will continue to engage with relevant institutions, including public and private financial institutions to expand the scheme.” 

To qualify for the loan, students should meet the following criteria:

•    Students whose annual household income is between R350 000 to R600 000;
•    Technical Vocational Education and Training (TVET) and public university students;
•    Undergraduate or postgraduate students;
•    70% science, technology, engineering and mathematics (STEM) programmes (which may be adjusted to include commercial programmes that are in demand in the labour market or entrepreneurial programmes);
•    30% Humanities programmes; 
•    Students willing to sign a loan agreement;
•    Students can apply for the loan in the first, second or third year to continue to be funded through the loan; 
• Students are expected to get an average of 60% pass rate and the loan will cover tuition, learning material and accommodation; 
•    Students who obtain 70% or above on average and within the prescribed time will get a 50% reduction on loans on request.

Nzimande has described this move as “yet another important milestone in the commitments of the ANC-led government to advance a better life for all as we celebrate 30 years of freedom”.

The loan scheme will be administered by NSFAS which has the legal mandate to offer student loans as per Section 4 of NSFAS Act 1999. 

“NSFAS represents one of the most progressive and successful efforts by the government to systematically break the legacies of inter-generational social inequality in access post-school education and training.”

Between 2019 and 2022, NSFAS has disbursed R123 billion distributed across 2 918 624 beneficiaries. –