About 86 712 students relying on the National Student Financial Aid Scheme (NSFAS) could be left unfunded in the 2024 academic period, increasing to 120 976 students in the 2025 academic period.

This emerged on Wednesday when the entity and other stakeholders including Universities South Africa (USAf) briefed the National Assembly’s portfolio committee on higher education over the readiness of the higher education sector for the 2024 academic year on the back of the National Treasury’s budget cut which will have ripple effects.

Acting NSFAS CEO Masile Ramorwesi presented a preliminary report where the entity stated everything was functional and progressing well in relation to the 2024 applications.

About 81 069 university students were still awaiting onboarding for 2023.

“With regards to the 2024 disbursement, upfront payment to cover tuition and accommodation allowances for January 31, we will make provision from our reserves in order to be able to cover the needs. TVET college disbursement for February will be done bi-weekly, this is to ensure that students who are onboarding receive their allowances soon. The TVET payments will be done on the 25th of each month as we did so this academic year and university payments will be on the last day of the month,” said Ramorwesi.

He said the communicated budget cut of R2 billion will result in a shortfall of R749.2 million at TVETs and the university shortfall was projected to be R1.1bn in the current financial period.

The reduction by 10% over the Medium-Term Expenditure Framework period will result in a projected R5.5bn shortfall in the 2024/25 period for universities.

“(There is) insufficient bridging finance available to fund shortfalls caused by the difference in academic year and financial year-end or caused by the timing of tranches. This could have a severe impact on the sector as NSFAS may not be able to pay allowances on time and when most needed by students are at the beginning of the academic year. (There is) inability to fully fund university and TVET students and appeals due to funding shortfalls,” he said.

USAf’s Dr Phethiwe Matutu said they were concerned about the lack of information from NSFAS on 2024 allowance payment processes and the third party involved.

“The late closure of NSFAS applications on January 31, 2024 creates difficulty for applicants registering on time.

There is no assurance that applicants will receive outcomes before campus begins and before registration deadlines close. This will have a major impact on enrolment tracking and may result in significant over or under-registration with the possibility of applicants being disadvantaged,” said Matutu.

NSFAS chairperson Ernest Khosa said there had been many incorrect statements of instability at the entity, and consequences management must not be confused as instability.

“Moving forward the entity needs to be firmer on consequences management to prevent where we are regarding the direct payment system. As for universities the entity wants them to assist it in finding solutions with the challenges we are faced with and not to only present problems. They have a very important role to play.

“We will proceed with all policies on accommodation, it’s work in progress and will still engage with USAf on the pilot project at TVET colleges.

The steps that will be taken will be publicly communicated before the end of this academic year. We would like the committee to also note the impact and consequences of the budget cuts might have next year, they are too ghastly to contemplate,” he said.

Khosa also noted that they were still in the process of dealing with the Werkmans report recommendations such as terminating the contract of former CEO Andile Nongongo, the fintech service providers and disciplinary action to be taken against staff members who were involved in the procurement process.

Committee chairperson Nompendulo Mkhatshwa said: “We cannot be shocked and keep on being surprised next year as if people were not aware.

If the sector remains in turmoil it will mean stakeholder engagements were not meaningful. We need to get things right this time around, we don’t want the back and forth between NSFAS, universities and students.”

Cape Times