Applications for the government’s new loan scheme for higher education students from the “missing middle” have officially opened, though students and universities are still in the dark about how it will work.
The missing middle refers to students who are ineligible for free higher education because they come from households with an annual income above the R350,000 threshold, but cannot afford the costs themselves.
Earlier this month higher education, science & innovation minister Blade Nzimande caught the university sector by surprise with an announcement of a new student loan scheme, set to run in two phases. For phase 1, the government had set aside R3.8bn to provide loans in the 2024 academic year to 47% of the estimated 68,446 students who fall into the missing middle. Phase 2 will run from 2025 to 2034.
On Tuesday Nzimande encouraged students to apply for loans from the National Student Financial Aid Scheme (NSFAS), though universities have yet to be told how they should determine which students are eligible and NSFAS has yet to spell the terms and conditions of the loans.
The deadline for NSFAS applications closes on January 31, leaving students with barely a week to apply.
Nzimande declined to provide any further information about the new loan scheme, saying NSFAS is still developing the criteria and conditions for funding, and will make a public announcement next week.
Undergraduate and postgraduate students will be eligible for loans, 70% of which will go to students studying science, technology, engineering and mathematics fields. This category might be adjusted to include “commercial programmes that are in demand in the labour market”, he said, without elaborating.
The minister urged students with outstanding NSFAS loans to honour their commitments, saying the money is needed to help fund the next generation of students. NSFAS is still trying to recoup loans provided to students up to 2017, before the introduction of free higher education in 2018 for students from poor and working-class homes. Graduates are required to start paying back their loans once they earn more than R30,000 a year.
Nzimande previously said the decision to provide loans to the “missing middle” is based on the recommendations of a report compiled by the ministerial task team he appointed to look into financing higher education. When asked why the report has not been made public, he said it is confidential, because it has been submitted to cabinet.
“Reports to cabinet are secret documents. But since we have started taking the very first steps of implementing the comprehensive student funding model we [will] possibly declassify it and release it so people are aware of what it says,” he said.
NSFAS spokesperson Ishmael Mnisi said the agency has yet to resolve 11,000 outstanding student allowances for 2023, most of which were for Unisa students. NSFAS has previously blamed universities for the outstanding allowances, saying they had failed to submit registration data timeously.
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