Income-contingent loan model opens the way to deal with missing middle - Bawa

There are concerns that the Fees Commission report leaves more questions than answers, as President Jacob Zuma has not made a pronouncement on the report.

The Commission finds that universally free higher education in the country is not viable.

According to the Fees Commission, the funding schemes for higher education are inequitable, inadequate and unsustainable.

The Commission recommends that the National Student Financial Aid Scheme (NSFAS) be replaced at universities by Income-Contingency Loans sourced from commercial banks, with NSFAS only funding students at Technical Vocational Education and Training (TVET) Colleges.

Stephen Grootes spoke to CEO at Universities South Africa Professor Ahmed Bawa and Sizwe Nxasana who is the National Student Financial Aid Scheme (NSFAS) chairperson.

Bawa says the income-contingent loan model opens the way to deal with missing middle.

It really opens the way for us to deal with the entire student body, not just with those students who fall into the poorest bracket.

Ahmed Bawa, CEO at Universities South Africa

The big challenge for us is that it is not in line with the political demand for free education.

Ahmed Bawa, CEO at Universities South Africa

Nxasana says however the proposed contingency loans is not a practical way of solving the student finding problem.

There just isn't that capacity in treasury to guarantee all loans that will be issued to students. The issue really is as a bank you don't just issue loans when you know there are going to be defaults....

Sizwe Nxasana, National Student Financial Aid Scheme (NSFAS) chairperson

READ: Banks can't lend money without expecting it back: Fees Report

We have made proposals which show that the country can afford to provide free education to the poor by making sure that the allocations from the fiscus as well as leveraging private sector finding that comes from contributions that would for instance be leverage from triple BEE schemes, philanthropies and foundations......

Sizwe Nxasana, National Student Financial Aid Scheme (NSFAS) chairperson

And for the working class students a combination of grants and some income contingent loans that will be made available by this partnership between NSFAS and the private sector.

Sizwe Nxasana, National Student Financial Aid Scheme (NSFAS) chairperson

Click on the link below to listen to the full audio....


Recommended

by THE NEWSROOM

CapeTalk welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the CapeTalk community a safe and welcoming space for all.

CapeTalk reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

CapeTalk is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
Banks can't lend money without expecting it back: Fees Report

Banks can't lend money without expecting it back: Fees Report

Director of Banking Association of SA says they are prepared to play a role but the fees recommendations need to be sustainable.

Free education for TVETs and university loans provided says Presidency

Free education for TVETs and university loans provided says Presidency

Spokesperson for the Presidency Bongani Ngqulunga outlines some of the recommendations made in the Fees Commission Report.

DA 'thrilled' over PAIA success as Fees Commission report is set for release

DA 'thrilled' over PAIA success as Fees Commission report is set for release

President Jacob Zuma will release the #FeesCommission Report on Monday afternoon.

Free education should've been implemented a long time ago - Holomisa

Free education should've been implemented a long time ago - Holomisa

UDM Leader, Bantu Holomisa responded to reports that the President is interfering in the operations of National Treasury.

More protests loom as students await verdict on tertiary fees

More protests loom as students await verdict on tertiary fees

On Thursday about 200 students caused disruptions to classes at the University of Cape Town.

Popular articles
[LISTEN] Accidentally shared a nude on a WhatsApp group? Here's what you can do

[LISTEN] Accidentally shared a nude on a WhatsApp group? Here's what you can do

A woman mistakenly shared a naked photo of herself on a parent Whatsapp group and now it's gone viral.

De Lille: Additional water resources are not going to stop Day Zero.

De Lille: Additional water resources are not going to stop Day Zero.

The Level 6B water restrictions will come to effect on 1 February and residents are asked to use only 50 litres of water per day.

Punitive tariff hike for water guzzlers to hit CT households where it hurts

Punitive tariff hike for water guzzlers to hit CT households where it hurts

Harsher punitive tariffs on the cards as 'Day Zero' becomes a reality as the result of 60% of Capetonians who ignore water limits.

WATCH: Innovative spray limits toilet flushes and saves water

WATCH: Innovative spray limits toilet flushes and saves water

Loo Me is a simple yet effective scented foam that takes the yuck out of "mellowing" toilets preventing multiple flushes.

It's not the end of the road... Top tips to improve your matric

It's not the end of the road... Top tips to improve your matric

"Recognise that it’s not the end, it’s the beginning." Expert advise for school-leavers who want to improve their results.