COMMISSION OF INQUIRY PROPOSES STATE-BACKED LOANS FOR SOUTH AFRICAN STUDENTS

PRETORIA, A Commission of Inquiry into the feasibility of making higher education and training fee-free in South Africa has recommended that all students studying at both public and private universities and colleges — regardless of their family background — be funded through a cost-sharing model of government-guaranteed loans sourced from commercial banks.

The commission, headed by Justice Jonathan Arthur Heher, has recommended that through this cost-sharing model, commercial banks issue government guaranteed loans to the students which are repayable by the student upon graduation and attainment of a specific income threshold.

Should the student fail to reach the required income threshold, the government bears the secondary liability, the report proposes.

The commission further recommended that all students at Technical and Vocational Education and Training (TVET) colleges should receive fully subsidized free education in the form of grants that cover their full cost of study and that no student should be partially funded.

President Jacob Zuma on Monday released the report, which recommends that the existing National Students’ Financial Aid Scheme (NSFAS) model be replaced by a new Income Contingency Loan (ICL) system.

Should government be opposed to this model, the commission recommends that government consider the Ikusasa Student Financial Aid Programme, an Income Contingency Loan Funding Model proposed by the Ministerial Task Team on Funding for Poor, Working Class and Missing Middle Students.

The commission further recommended that government consider the introduction of a university fee capping mechanism to avoid the cancelling out effect.

The Inter-Ministerial Committee on Higher Education Funding, led by the Minister in the Presidency Jeff Radebe, and the Presidential Fiscal Committee, whose lead Minister is the Minister of Finance, Malusi Gigaba, are processing the report. President Zuma said he would make a pronouncement on the report once the Ministers have concluded their work.

Source: NAM NEWS NETWORK