Higher Education Minister Blade Nzimande said government has set aside a R3.8 billion budget to establish a comprehensive student fund within the National Student Financial Aid Scheme (NSFAS) to assist deserving students trapped in the ‘missing middle’ category.
Also read: NSFAS budget cuts could leave more than 87 000 students without funding in 2024
The announcement came on Sunday when Nzimande spoke at a media briefing in Pretoria, where he explained that these students seeking to pursue their studies at universities and TVET colleges will receive funding in the form of a loan.
‘Today I am pleased to stand before you to indicate that we are now ready to implement the first phase of the Comprehensive Student Funding Model, which will ensure that the “missing middle” students will now be able to access financial support from government in a form of a loan to pursue their studies,’ said Nzimande.
While NSFAS funds are presently available to students from homes that have an annual income of less than R350 000, ‘missing middle’ students are those with annual household incomes lying between R350 000 and R600 000 who have traditionally not qualified for state assistance but are unable to independently afford tertiary education fees.
According to the most recently conducted National Income Dynamic Study, it is estimated that 85.6% of all households fall into the low-income category (under R350 000 p.a) while 11% of households fall into the ‘missing middle’ category.
Nzimande said the initial capitalisation fund totalling R3.8 billion to support the loan scheme in 2024 is committed to changing this.
‘This amount will fund 47% of the missing middle students, that is, 31 884 of the estimated 68 448 missing middle.’
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Nzimande described the announcement of the missing middle loan scheme as a significant milestone, set to be implemented in two phases.
The first and current phase (2024 to 2025) allocates the R3.8 billion, which is comprised of R1.5 billion from the National Skills Fund (NSF) and R2.5 billion from the Sector Education and Training Authorities (SETAs).
Phase two (2025 to 2034) intends to see the government increase seed funding contributions from R31.6 billion to R42.1 billion over ten years, approximately equating to an increase from R3.1 billion to R4.2 billion annually.
He added that the scheme intends to fund 70% of students studying science, technology, engineering and mathematics (STEM) programmes and 30% of students studying humanities programmes.
The 70% allocation may be adjusted to include commercial programmes that are in demand in the labour market or entrepreneurial programmes.
Nzimande also added that, together with the National Treasury, the department will engage with relevant public and private financial institutions to expand the scheme.
In order to qualify for and maintain the funding model loan, Nzimande explained that students must be willing to sign a loan agreement and meet the following requirements and conditionalities:
- Household income between R350 000 to R600 000
- Intending to attend a public university or TVET college
- Intending to enter undergraduate or postgraduate studies
- Students can apply across their years of study, but are expected to get a 60% pass rate (average)
- Support includes tuition, learning material and accommodation
- Students who obtain 70% or above (average) and within the prescribed study time will get a 50% reduction on loans on request
Meanwhile, Nzimande confirmed that a 4.5% tuition fee increase for university has been approved by the department and will be implemented in 2025.
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Also read:
‘I have never used any money,’ says Nzimande amid NSFAS scandal
Picture: Dr Blade Nzimande / Facebook
