08/02/2017 14:38 GMT | Updated 08/02/2017 22:23 GMT

New Hope For The Education Crisis: Professionals Collaborating On New Student Funding Plan

Great minds of lawyers, actuaries, accountants and others have drafted a new student funding plan and it looks incredible.

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Incredible things can happen when the private sector and the public sector pool their resources and ideas together. Chairperson of the National Student Financial Aid Scheme (NSFAS) and co-founder of the National Education Collaboration Trust Sizwe Nxasana is heading a new student funding project called Ikusasa Student Financial Aid Programme, with more than 60 professionals in different capacities working together as a team.

As a gratuity of social responsibility, several corporate giants have deployed some of their brains at no cost to strategise, build and develop the programme aimed at addressing the needs of the poor and the "missing middle" students. Lawyers of Webber Wentzel, actuaries from Discovery as well as from the Association for Savings and Investments SA, bankers of the Banking Association of SA, chartered accountants from the South African Institute of Chartered Accountants (Saica) are all onboard to wrack their brains together in helping to address the education crisis.

Business Day reported that the pilot project aims to support 2,000 first-year students at seven universities and one technical college. The Cabinet approved the scheme in November 2016, and a draft was put together in December for public scrutiny and debate. The task team is consulting with students and other stakeholders.

It has been stressed emphatically that the programme is not a replacement of NSFAS, but rather is an additional funding programme as a collaboration between NSFAS and the private sector, Business Day reported. The current NSFAS model remains as it is at present, but will be undergoing revisions to address its flaws under Nxasana's leadership.

One of the key differences between NSFAS and the Ikusasa programme is that the latter will "front-load" grants. While NSFAS offers students the option to convert loans into grants in later years on condition that they pass their courses, the new programme will offer grants first, and in cases where students do well, will offer loans. It was set up this way because one of the central problems with the current NASFAS model is that those who pass and who are thus likely to pay back their loans are least likely to be required to pay back their loans, while those who fail and drop out may never be able to pay back their loans.

Another core principle of the Ikusasa programme is that all students who are funded under it will receive academic and emotional psycho-social support and mentoring to increase the pass rates.

The task team's actuarial model for the programme puts the estimated cost at 45 billion rand a year. Only 17 billion rand is currently available from government, which means that the remainder of R28 billion will have to come from the private sector. The task team is looking at innovative ways to raise funds from the capital markets, by way of student-funding bonds, which are common in countries of the global North, notably the US.