Issued by: The Minister of Education
I have great pleasure in announcing that an amount of R300 million has been earmarked in the 1996/97 budget of the Department of Education towards setting up a National Student Financial Aid Scheme for 1996.
It is hoped that these funds for the National Student Financial Aid Scheme will be augmented from other sources. For the purpose of raising funds from the international community and the local business sector, a small working committee, consisting of prominent persons from Government, higher education institutions and the business sector, has been set up under the chairpersonship of Dr Nthato Motlana. This working committee is already devising fund-raising plans and meeting various potential donors.
An advisory committee, in which all major stakeholders are represented, was set up under the chairpersonship of Dr Chabani Manganyi, Director-General of Education. On the basis of advice of this committee the following guide-lines will be used in administering and managing the scheme.
(a) Loan/Bursary split
In 1995, as recommended by the Carolus Crisis Committee, the bursary component of the Financial Aid package available to needy but deserving students has been in the form of an up to 40% rebate in lieu of academic success. In practice what this has meant, is that if a student has studied 4 courses and has been successful in all 4 courses, that individual has qualified for a 40% bursary.
International experience on student loan schemes shows that the use of a "carrot" is of great value in enhancing the success rate of students, and we will therefore continue with this approach for 1996.
(b) Minimum and maximum amounts
The ceiling for 1996 will be R10 000-00, which is a 10% increase from 1995. This decision is based on the fact that we simply have more money available in 1996 and therefore can afford to increase the maximum loan size accordingly. As regards the minimum award, this has been raised from R650-00 to R800-00. We anticipate that we should be able to assist just over 70 000 students for 1996.
(c) Interest rates in 1996
Interest was charged on TEFSA loans at 8,81% in 1995. This was based on the Consumer Price Index in 1994. It would however appear that in 1995 the Consumer Price Index has run at 9.1%. We did not want to raise interest beyond the psychological barrier of double figures. We have decided to charge interest at 9,9% in 1996, i.e. a 0,8% real rate of interest.
(d) Income contingent loan recovery terms
We have agreed that the terms for income contingent loans should be 3% of salary at a trigger of R26 300-00 per annum rising linearly to 8% of salary at R59 300-00 per annum.
(e) Other administrative matters
1. The scheme will be managed and administered by the Tertiary Education Fund of South Africa (TEFSA) during the first phase. 2. Insttutions will utilise their own Means Test. 3. Institutions will continue to measure potential to succeed. 4. Student's own contribution will form part of the total award of a student. 5. That NSFAS funding can be packaged with any other funding at the discretion of an institution.
B EARLY CHILDHOOD DEVELOPMENT (ECD)
I am delighted to announcethe launch of a major new initiative in the field of Early Childhood Development (ECD).
This initiative demonstrates our commitment to a sound foundation for lifelong learning and human resource development in this country. Our strategy in this area will result in an innovative project-based intervention, focusing on a reception year (age 3-6) as a first step towards the phasing in of fuller provisioning.
The emphasis will be on speedy and effective delivery, using those NGO's and CBO's that have provided valuable services without adequate recognition in the past. An enabling framework will facilitate the accreditation of practitioners and providers, placing them, too, on a pathway of learning and career development. Concurrently the strategy will concentrate on the development of interim policy, which will lead to a core curriculum and norms and standards for a sustainable and effective subsidy model for ECD provisioning.
To realise this strategy I have allocated an amount of R50 million to kickstart the process. The focus will be on the most deprived, and related to demographic needs. This amount will be distributed in consultation with the Coordinating Committee for Early Childhood Development (CCECD) and provincial departments of education.
C. 1996/97 EDUCATION BUDGET
Owing to media speculation about budgetary allocations to provinces for next year, I need to set the record straight by outlining the budgetary process folowed thus far:
The guide-line amount allocated to education for 1996,97, as it stands at the moment, represents only a 4% increase in nominal terms and no increase in real terms if compared with the corresponding amount for 1995/96. This must be viewed in the light of an annual growth in learners of about 4,4%.
The function committee on education was requested to ensure that the final allocation to provinces would enhance an accelerated drive towards equity and ensure maximum participation by provincial education authorities throughout the process.
The mechanism for the division of the guide-line amount among provinces is the outcome of a thorough investigation which was undertaken by the Function Committee for Education, involving all provinces, over the last five months. Whilst the allocation to the various provinces might not address all the provincial needs I am satisfied that the allocations represent an optimum solution within a context of political, education and administrative constraints facing all the provincial education departments.
D. DRAFT WHITE PAPER ON SCHOOL GOVERNANCE ORGANISATION AND FUNDING
This important document is now in the public domain for debate and discussion that should enrich the final product which I hope to present to Cabinet at its first meeting early next year. There have been several representations to me to extend the date for submissions by the public from 10 January 1996 to a later date. Whilst sympathetic to these concerns I have to balance them with the concerns of those who want clarity and guidance for the new year. I have therefore decided to extend the date from 10 January 1996 to 20 January 1996. I therefore hope that members of the public will fully utilise this period to engage in this important debate on the future of our schooling system.