New R3.8 billion fund for South Africa’s ‘missing middle’

According to an announcement made by the department’s minister, Blade Nzimande, the new Comprehensive Student Funding Model introduces measures to support a wider-ranging category of students – including those who are currently not supported by the Nsfas bursary and funding policy.

This new category is for students whose families who have a total income of more than R350,000, but not more than R600,000 per annum.

Previously, Nsfas funding was only available to households falling in the low-income category (>R350,000 p/a). Between 2019 and 2022, Nsfas disbursed R123 billion worth of loans for 2,918,624 beneficiaries.

According to the most recently conducted National Income Dynamic Study, it is estimated that 85.6% of all households fall in the low-income category, and 11% of households fall into the missing middle category.

This newly-introduced category by Nsfas “will ensure that the missing middle students will now be able to access financial support from government in a form of a loan to pursue their studies,” said Nzimande.

The Comprehensive Student Funding Model is said to be implemented in phases. The first and current phase (2024 – 2025) allocates a total of R3.8 billion. R1.5 billion is from the National Skills Fund (NSF), and R2.3 billion is from the Sector Education and Training Authorities (Setas).

“This amount will fund 47% of the missing middle students, that is, 31,884 of the estimated 68,446 missing middle,” said Nzimande.

Phase two (2025 – 2034) of the funding model seeks to increase government funding contribution from R31.6 billion to R42.1 billion over ten years – approximately equating to an increase from R3.1 billion to R4.2 billion annually.

In order to qualify for the government loan, certain requirements and conditions have been announced:

• Students household income must be between R350,000-R600,000;
• Funding is for TVET and public university students;
• For undergraduate or postgraduate students;
• 70% allocation for science, technology, engineering and mathematics (STEM) programmes;
• 30% allocated for humanities programmes; and
• Students must be willing to sign a loan agreement.

Conditionalities:

• Students can apply across their years of study, but are expected to get a 60% pass rate (average);
• Support includes tuition, learning material and accommodation;
• Students who obtain 70% or above on average and within the prescribed time will get a 50% reduction on loans on request.

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