Why Sizwe Nxasana stepped down from Nsfas

When former President Jacob Zuma blindsided National Treasury by unilaterally announcing free higher education minutes before the start of the ANC’s elective conference in December 2017, he precipitated a major crisis at the National Student Financial Aid Scheme (Nsfas).

“We had to meet two days later [after Zuma’s announcement on December 16] to figure out how the free education plan was going to be funded and work because there were no details. The government acknowledged that it had no details on how this was going to work,” said Nsfas board chairman Sizwe Nxasana, who spoke at the Gordon Institute of Business Science panel on job creation and economic growth on Tuesday evening.

Many saw Zuma’s surprising decision for what it was: a populist attempt to boost support for presidential candidate Nkosazana Dlamini-Zuma ahead of the ANC leadership election. It had nothing to do with assisting poor students.  It was a decision that would spark the exodus of leadership at the troubled Nsfas, and will soon result in the dissolution of the board of directors as control of the scheme is ceded to an administrator.

Cracks at Nsfas, which funds students at universities and technical and vocational education and training (TVET) colleges, were heightened after the shock resignation of Nxasana on August 9.

Nxasana, a respected businessman, and former FirstRand CEO, was appointed chairman of Nsfas three-years ago in a desperate bid to ensure the troubled scheme did not collapse.

Despite a budget that increased to R8 billion plus in the 2018/19 fiscal year from the R441 million at its inception in 1999, Nsfas faces chronic shortages of funds as it battles to recover loan repayments from student debtors. On his arrival Nxasana pulled together the banking and insurance industry and the South African Revenue Services to track employed debtors to ensure they repay their loans.

Ballooning applications

Every year, Nsfas received approximately 350 000 funding applications from students for university and TVET college study. This number, Nxasana said, doubled to over 600 000 after Zuma’s announcement.

“Suddenly there were young people sitting at home, who may have wanted to go to a university or TVET college, who were suddenly told by political parties to ‘go and queue at TVET colleges and universities and force them to enroll you.’

“It has been proper hectic and relentless since December,” Nxasana said.

So “hectic” have things been that higher education minister Naledi Pandor has asked Nsfas to halt funding applications for 2019 due to the backlog in the allocation of funding for 2017 and 2018.

Zuma’s plan was in stark contrast to the recommendations that emerged from the commission of inquiry into free higher education and training – headed by retired judge Jonathan Heher – that free higher education would put a massive strain on the fiscus. Already facing a revenue shortfall of R50.8 billion for the 2017/18 financial year, National Treasury is now scrambling to find R57 billion to fund fee-free higher education.

Nsfas was forced to convert loan agreements to bursary agreements to accommodate the free education policy, but not all applicants agreed to terms of the funding.

“Students said ‘free is free and why you asking us to sign stuff when we were told this is free’. You sit with a situation right now where more than 400 000 students have signed and have been funded but we have only paid those that have signed the bursary agreement,” said Nxasana.

Resignation

The pressures of the Nsfas system played a part in Nxasana’s decision to resign a year before his term as chairman expired. It also took a personal toll on him, as he had to relocate to Cape Town, where Nsfas is headquartered.

“I was supposed to have been nonexecutive chair at Nsfas but I was an executive at Nsfsas, which is not exactly what I signed up for. I was not being paid or taking any fees because it’s a commitment I had made to assist,” he said.

“I got to a stage where I completely burnt out as I spent many hours a week on Nsfas issues. And with elections next year, there was no political will to make tough decisions to sort things that are fundamentally wrong.”

But the broader intention of stepping down was to pave the way for another leader to take Nsfas forward, he said.