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Student loan debt reaches $1.5 billion and climbing

Current student loan financed by the National Student Financial Aid Scheme (NSFAS) for tertiary education at the moment stands at R13.4 billion (US$1.5 billion) in delinquent loans it has been revealed by South Africa’s Higher Education Minister Blade Nzimande. Somewhere around 20% of students who took out loans are yet to pay a single cent towards their debt repayment packages.

The Minister has stated that recovering the capital sum is a priority of the education department and has encouraged the South African Revenue Service (SARS) to get involved and  garnish money from defaulters’ salaries.

NSFAS has publicly stated that it is lacking the relevant skills to recoup loans and that the scheme is not proficient at recovering debt. NSFAS has told parliament that only 5% (R638 million) of the total long-term debts has been recovered as at the end of 2011 which stood at R12.2 billion.

In spite of the delinquency rate of students loans, Nzimande has applauded the NSFAS scheme as “a feather in the government’s cap”. In 2012, R5 billion in students loans was granted and that since the scheme’s inception in 1999 more than R19 billion has been disbursed.

 

Student financial aid 1

 

Background of Student Loans

Higher education in the country has demonstrated and plays a crucial role in boosting the economy and contributed towards developing a wealthier society by producing highly skilled graduates.

The intention of government is to boost the annual university enrollment from 900,000 to 1.5 million by 2030 and realize their objective of a 23% higher education participation rate.

In January of 2012, a Green Paper was published setting out the goals and objectives of government pertaining to post-school education and training, with a target of generating  4 million students by way of colleges and other post-school institutions.

Currently, the country has a 16% participation rate of adults aged between 18 and 24 in comparison with a global average of 30%.

To be able to open access to  higher education and increase the number of students, it is vital that a student loan and bursary scheme remain in existence and promoted. In 1994 there were merely 495,000 students annually registered for university education. In 2012, this number stood at 900,000.

The current loan and bursary scheme has a stated objective to provide a sustainable educational funding system for student loans and bursaries and making it possible for academically deserving and financially needy students to realize their potential. The goal is to “make a difference in our land” – a key goal for a deeply unequal society.

The principal way whereby poorer students can obtain access to higher education is via the nation’s grants and loan scheme. Based on reports from the NSFAS, students loans and granted supported something like 32% of all university students in 2011.

 

Student financial aid 2

 

Access to and repayment of student loans

Based on Absa’s head of transitional banking,  Harriet Heymans, the bank estimates that a further 25% of students make application via other commercial institutions to obtain student loans to finance their studies.

In the USA there are reports and statistics proclaiming that the current student debt exceeds $1 trillion and that it takes somewhere around 10 years for individuals to repay their students loans after entering the work force. There are concerns that South Africa may very well be heading in the same direction.

As opposed to the USA, South African banks are well regulated and force lenders to comply with the National Credit Act and Consumer Protection Act. It is precisely these acts and laws that will prevent the country from entering an education loan crisis.

The National Credit Act and Consumer Protection Act assists to protect and support students. Making sure that loans are repaid within a specific time frame, all student education loans are registered in the names of the students parents  or in the case of part-time workers the student themselves.

Ensuring that students loans are repaid has additionally been backed up by Wits University Vice-chancellor Loyiso Nongxa who has expressed that it is crucial  that loans are repaid and that the non payment of loans goes beyond a mere resistance to honoring the debt.

Beside the undeniable fact that there currently exists a high level of graduate unemployment; there also exist the issue where students who are granted loans however do not graduate and find it difficult to seek out employment and repay their debts.

Even if a student drops out of college or university they are still liable and accountable for their debt. South African Students Congress claims that this figure is roughly a third of all students who have received loans.

According to NSFAS student loan terms and conditions, it specifically states that students who receive loans have a primary responsibility “to repay the confidence shown by studying hard, graduating and [entering] the workplace”. Thereafter, the loan has to be repaid.

In spite of this, currently students are only obliged to repay their debt once they have found employment and their salaries exceed R30,000 annually. Once this threshold has been achieved students are obliged to pay 3% of their annual salary increasing to a maximum of 8% upon attaining a salary of R59,300.

Nzimande is also committed to retaining the current policy whereby hard studying reduces the loan element, converting up to 40% of the borrowings into a non-repayable bursary which is dependent on the year-end academic results. The NSFAS annual report shows that at the present time this loan-to-bursary conversion translates into 15% of the current total student loan debt.

As reported by Business Day the country spends far too little on tertiary education. Current spending indicates that the current budget of R31 billion or 13% of the total education budget. The student loan system is trying to resolve two contradictory tendencies by, in essence, hoping to get more individuals into university while at the same time trying to maintain a constrained budget.

“The problem is complicated by a high dropout rate, which renders some of the spending ineffective,” – Business Day.

 

Education savings

 

Resolving the problem

Finding a solution to the students loans and grants issue is no simple task. The NSFAS is unable to say with 100% confidence whether or not the capital on student grants and loans will be repaid. There is a trend whereby students begin repaying their loans however in time become untraceable or end up in informal employment. The same holds true for those students who fall below the earnings threshold.

Furthermore, there is doubt whether or not debts will be repaid considering that that this depends on the reality that when students exit the tertiary will they find employment and what will their annual earning be. Also, will the scheme have the ability to monitor and keep track of students who are granted bursaries and loans; not forgetting the effect of inflation which also impacts the student loan. A loan of R10,000 currently does not translate into the same buying power for that capital three years hence. Add to that equation the reality that the scheme charges an interest rate equivalent to 80% of the repurchase rate, presenting a considerable discount to commercial interest rates.

Career Wise MD Monique Adams has stated that she is also wary of the loan problem and believes that there is an ever increasing debt problem in South Africa with more and more students taking out loans.

“The problem will not go away, but will increase as more students take out loans,” she concluded.

Teaching bursary to promote maths and science

 

 

The recruitment and training of teachers in the vital subjects of maths and science is set to receive a significant boost as a result of a venture established by the Department of Basic Education in a joint venture with the Independent Schools Association of South Africa (ISASA) and Investec.

By way of this collaboration, the department has created and adopted the “Teacher Assist Approach” programme, which it will implement when recruiting and placing new teachers in vital  subjects that include Mathematics, Science and English.

The department, ISASA and Investec unveiled this historic public-private partnership with the aim of training 200 teacher interns in the priority subjects. The teachers are going to be trained at independent schools bertween 2013 and 2020.

The programme will employ the combined resources to develop quality teachers in Maths, Science and English. The department will provide for the total study and subsistence costs of the teachers for the period of their training via the Funza Lushaka Bursary Scheme.

ISASA schools will host, train and mentor the interns. The group will in addition manage the programme which will involve recruiting, selecting and placing prospective teachers, as well as supporting them throughout the period of their internship, which will take between 3 and 4 years.

Investec is expanding it’s support at school level and is extending its focus to the vital need to develop high quality teachers in the key subjects of maths and science. Its function will in addition see them make available capital for enrichment activities for instance the orientation of the new recruits, academic support along with hosting of mentoring meetings.

Basic Education Minister Angie Motshekga mentioned, in line with the education strategy – Action Plan to 2014: Towards the Realisation of Schooling 2025, the department was in fact making an effort to boost the supply of young and qualified educators, especially for gateway subjects.

 

 

Basic Education Minister Angie Motshekga

 

“The Funza Lushaka Bursary Scheme is one way of [achieving this], hence our support for this initiative. This will help us in placing the just over 2 000 new graduates Funza Lushaka has produced over the last three years and in tackling current teacher shortages,” Motshekga said.

The day-to-day support of the recruits is going to be made available from the ISASA, which includes the ongoing evaluation of the recruits, to make certain that individuals who need additional support are actually identified and assisted appropriately. ISASA will be managing every aspect of the teachers’ development, utilizing the help and support of the department and Investec. It is anticipated that the training model could be the catalyst towards grooming the next generation of teachers.

The primary objectives and goals of the programme is to develop confident, competent teachers, along with a robust dedication to Maths and Science teaching as their lifelong profession. Undoubtedly, the multiplier effect associated with skillful teachers within these priority subjects is truly a major contribution to the teaching profession.

Suitable applicants are school-leavers with university entrance passes in addition to superior results in Maths, Science or English. Individuals with university credits or degrees in these subjects will also be among those benefiting from hte bursaries to study towards a teaching degree.

Investec representative Setlogane Manchidi encouraged interns to carry out some research, stating that ” he who doesn’t research, has nothing to teach. “Whatever you teach our children and allow them to discover about themselves will be the foundation upon their future,” Manchidi told the interns.

Transnet Foundation Senior Manager: Education, Theresa Vivian Moila acknowledged the reality that the teaching profession was in fact undervalued, however, it is not all “doom and gloom” and challenged the interns to revive and restore the excellence within the teaching profession.

“Be at the frontline to give learners requisition knowledge. You have to open doors of opportunities for learners and restore the love of learning. Become the village that raises children. Go out and conquer the world and touch the lives of learners and communities in a positive way,” said Moila.

Nomthandazo Dube from Tembisa, who feels that she was born a teacher, signed up with the programme  to acquire practical experience. “I want to find my feet first before going out to teach. My goal is to further my studies and do Education Psychology because it gives you the tools you need as an educator to understand the learner behaviour and how to respond in different situations.

Applicants for 2014, especially graduates wishing to access bursaries, can get application forms by contacting ISASA on 011 648 1331.

Source: SAnews.gov.za

Guidelines and helpful hints when applying for a bursary

 

After you complete your high school final examinations with outstanding results and grasp that that you are in need of funds to continue your education, what should you do? This is actually the predicament facing a large number of students after graduating high school with the end result that the majority of the younger generation find themselves sitting at home possibly searching for employment or simply just becoming a burden to their parents . For anyone who is considering making an application for a bursary, be sure you apply prior to the closing date.

 

Precisely what is a bursary?

A bursary can be described as financial support granted to a student dependent on a mixture of academic achievements and financial requirements to further his/her education with a higher learning institution. The length of a bursary may vary from a year or may very well be given for the whole period of study. Extension of a bursary is dependent upon your academic accomplishment. Various large organisations, companies, governmental and non governmental organisations often fund bursaries for study in a specific field.

 

Bursary terms and conditions are different

The terms and conditions of bursaries can vary enormously based upon, in the majority of cases, the company/organization providing the bursary. Contract bursaries in most cases demand that you “pay back” the bursary by way of working at the company when you have concluded your studies and frequently they provide a bursary work experience along with a position subsequent to graduation.

 

Are you Eligible for a Bursary?

In order to be eligible for any kind of bursary you will need to satisfy their selection criteria which usually based on your academic results and apply to all candidates. Virtually all companies will likely not take into consideration anything below 60% on the specific subjects which you will be required to pass while some 50%. It all depends on the company/organization providing the bursary. Although many are able to offer bursaries depending on financial needs they will also take into consideration your academic progress.

Additional important factors which often can be pertinent to bursary candidates are: Your citizenship as well as your acceptance into a suitable study programme at an accredited higher education institution. Candidates also have to fulfill certain admission requirements of the institution and in addition they also have to satisfy the national election criteria for that bursary organization.

 

What do Bursaries take care of?

A number of bursaries will in some cases take care of just about all the recipients’ vital expenses. Expenses covered include things like tuition, full board and lodging in addition to meals, books and learning materials, along with a small allowance for monthly cost of living. Universities differ regarding their cost structures, consequently the total value of a bursary is different from institution to institution.

 

Guidelines when submitting an application for a bursary.

 

  •     Bursary application preparation should commence at school. Give your very best  in grade 11 and 12 to attain the best results  as a result it is possible to fulfill the bursary’s academic requirements.
  •     As the beginning of the year  start collecting information regarding companies and organisation that offer bursaries which deal with your field of study (bursary officer’s contact details, application process, application schedules and bursary criteria). This information and facts are, in most cases, published on the company’s website.
  •     While numerous companies and organisation will in fact advertise online or perhaps in various newspapers the moment their bursary programme is opened, it is advisable to take initiative and determine if there are any bursaries available.
  •     Companies will in most cases make clear the application process either in their advertisements or website. Pay attention to these details as this will enable you to plan the best way forward. In most cases, if the information is not on the company’s website, they will post/email it to you after you’ve applied.
  •     After you’ve collected all the companies’ details and received the appropriate information and facts with regards to the bursary application process look into the selection criteria to make sure you meet the requirements and are eligible for that bursary.
  •     Get a hold of every piece of information they could possibly want: your personal and family information, specifics of your proposed study, parent’s employment details, along with local community participation information, academic records, personal/academic achievements and so on.
  •     Be certain to make available all supporting documentation as requested. Nothing more nothing less. In most cases application forms will give you a space for your motivation, if not, it is advisable to include your own personal motivational letter.
  •     Submit it to the correct address by the due date, in addition make sure you provide your correct contact information as requested.
  •     Keep a copy of your application form given that they could possibly ask you on exactly what you wrote should they call you for an interview.
  •     Be mindful of the fact that  companies receive thousands of bursary applications annually as a result it’s critical not to expect any special treatment. So bare in mind you happen to be one in search of them and certainly not the other way around even if you have excelled in all your subjects.  No one automatically qualifies therefore do your very best to impress them in your application forms.

R2m bursary scheme to address shortage of doctors

 

 

Bursaries are now being available to matriculants from poor families who have dreamed of becoming doctors.

The Mopani district municipality in Giyani, Limpopo, has earmarked R2 million in order to help deal with the general shortage of health professionals in rural areas.

“This year, we have chosen the medical field because of the dire shortage of health practitioners in the country, province and district,” said municipal spokesman Neil Shikwambana.

The bursary scheme is exclusively intended for studies in medicine, pharmacy, optometry, ophthalmology, dentistry, oral hygiene, environmental health, occupational therapy along with dental and speech therapy.

Shikwambana pointed out that the bursary scheme would in addition take care of tuition fees, books, accommodation and meals.

“Successful recipients would be required to work for the municipality for a period equal to the duration of their study,” he was quoted saying.

 

He explained that preference is going to be made available to the best-performing matriculants coming from poor backgrounds who are eligible for Bachelor’s degrees and also have secured an admission with a recognised South African university.

“Strongly motivated applications from students who have successfully completed their first year of undergraduate study in a medical field will also be considered,” he said.

The deadline for applications is January 31

South Africa has 0.57 doctors for every 1 000 individuals of the population, which happens to be one of the lowest ratios globally.

The country would need to train approximately 2 400 doctors annually to maintain the current figures on par with population growth, however , universities currently only produce 1 200 new doctors on an annual basis.

For more information, contact Mopani district municipality –

Telephone: +27 15 811 6300
Email: tim@mopani.gov.za
Website: http://www.mopani.gov.za/

Source: BuaNews

SA Treasury launches R9bn jobs fund

The National Treasury’s R9 billion Jobs Fund, which endeavors to generate 150 000 job opportunities over three years, is currently accepting applications from companies and non-governmental organisations with innovative job creation projects, stated the Minister of Finance Pravin Gordhan.

Gordhan revealed to a media briefing before his Budget Vote in Parliament that the aim was to provide R2 billion in grants this financial year to those in the private sector.

These would either be in the form of matching grants, or grants where companies and organisations had dedicated a percentage of funding to the respective project.

Gordhan initially announced the master plan to establish the Jobs Fund in his Budget Speech in February.

 

Finance Minister Pravin Gordhan

 

The fund would run for three years and is administered by the Development Bank of Southern Africa (DBSA).

Gordhan stated his department decided to go with the DBSA to administer the fund as a result of the development bank’s footprint – which provides coverage for over 200 municipalities throughout the country along with its experience with funding community development projects.

The fund is geared towards established companies with an above average reputation and that also intend to broaden existing programmes or pilot innovative solutions to employment creation, with a unique focus on opportunities for young adults.

The precise focus is not in particular on small or micro businesses, given that the government provides other programmes that can assist entrepreneurs, including the Small Enterprise Development Agency (Seda) for business support, Khula, Samaf, the NEF and the IDC for small business funding and the Technology Innovation Agency (Tia) for innovation funding.

 

Gordhan explained that the fund would concentrate on four areas, namely: enterprise development, local infrastructure development, support for work seekers and institutional capacity building.

Enterprise development includes assistance to local procurement, marketing support, equipment upgrading or enterprise franchising.

Local infrastructure development incorporated the funding of light manufacturing zones and communication links to market goods, he explained.

Support for work seekers would include establishing networks and projects that are able to provide training and career guidance, at the same time making improvements to institutional capacity would include funding internships and mentorship programmes.

The National Treasury is going to continue to monitor and assess the overall performance and sustainability of projects funded via the initiative and all projects are required to be run for at least three to five years.

 

Gordhan mentioned the level of urgency surrounding the country’s high level of unemployment necessitated that the country required a fresh energy and infusion in the job creation process.

He explained the fund is not going to compete with other government projects, but instead complement them.

“One hopes that this will encourage completely new forms of innovation, new forms of creativity and open new areas of job creation possibilities,” he said.

The DBSA’s investment committee will be chaired by Frans Baleni, current deputy-chairperson of the development bank and secretary general of the National Union of Mineworkers (NUM).

Baleni announced that job applications would be welcomed from today and investment would most likely target poor and rural regions.

The success of the jobs fund relied on strong co-operation between the private sector and the government, he was quoted saying.

Baleni explained the team had received directives to process application timeously. The technical team, which processes applications, would meet weekly and the investment team, which makes the final selection, would meet monthly.

 

“We are required to submit bi-monthly reports to the shareholder (the National Treasury), which means that there would be no time to relax,” he stated.

Brian Whittaker, chief executive of the Business Trust, who has been selected as the fund’s vice-chair, said the fund will be a bold new initiative that is going to release a degree of creativity on tackling unemployment

“There’s an opportunity here to do something innovative and that’s what excites me,” said Whitackker.

Paul Kibuuka, who heads the DBSA’s development fund, said the fund aimed to generate 150 000 jobs over three years, adding that each job funded will need to last for at least one year.

He said the fund aimed to target somewhere between 1 000 and 2 000 projects.

The closing date for the first round of applications is July 31 and a large portion of applications will be processed electronically.

 

Those interested, as well as applicants, can contact the Jobs Fund on 086 100 3272

or

visit www.jobsfund.org.za

 

Source: BuaNews