This internal deficiency hampered the National Student Financial Aid Scheme's ability to collect outstanding debt, newly appointed chairman Sizwe Nxasana said in an interview on Monday, 19 October 2015. This also made it difficult for the scheme to extend its low-interest loans to a wider pool of poor students.
The admission comes as Higher Education Minister Blade Nzimande meets university vicechancellors and student leaders today to discuss fees that have given rise to protests at tertiary institutions around the country.
Nxasana said the scheme had a recovery strategy to improve efficiencies. In the 2014-15 financial year, recoveries had plunged 36% to R247.5m compared to R338.8m collected last year. This was not acceptable, he said.
At the end of March, it had a loan book with a nominal value of R21.3bn. This amounted to R6.2bn after fair value and impairment adjustments of R15bn.
Nxasana cited "positive consent" as another stumbling block for the scheme recouping outstanding balances as the principle meant it had to get approval from former beneficiaries before it could make collections.
The funding crisis was brought to the fore by University of the Witwatersrand students who staged a protest last week, calling for a freeze on a proposed 10.5% fee hike.
The university's council was locked in discussions with student leadership at the weekend on the issue. The parties were scheduled to meet Monday, but this was scrapped after the university's senate was stormed. Academic activity at the university remained suspended yesterday.
National Student Financial Aid Scheme funding has shot up to R9bn from R441m in 1997, but this remained insufficient, Nzimande conceded at a briefing on Monday. The minister also pleaded with universities to streamline expenses to arrest runaway inflation and called for the establishment of "a scientific formula to understand cost drivers".
Source: Business Day
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