Govt announces new R3.8b NSFAS loan scheme for ‘missing middle’ students

The new loan scheme will cater for students whose household income is more than R350,000 but less than R600,000 per annum.

The government has announced a new R3.8 billion loan scheme for “missing middle” students which the National Students Financial Aid Scheme (NSFAS) will administer.

This constitutes the first phase of a new Comprehensive Student Funding Model that the government is now ready to implement, Higher Education and Training Minister Blade Nzimande said during a media briefing on Sunday (14 January).

NSFAS ‘missing middle’ loan

“Missing middle” students are those who come from families whose annual income is more than R350,000 but less than R600,000. Currently, NSFAS bursaries are only available to students whose household income is less than R350,000 per annum.

According to Nzimande, the government has committed an initial amount of R3.8 billion for phase 1 of the loan scheme in 2024. “This amount comprises of R1.5 billion from the National Skills Fund (NSF) and R2.3 billion from 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,” he explained.

The timeframe for phase 2 is 2025-2034, during which the government plans to allocate between R31.6 billion and R42.1 billion in seed funding. This amounts to approximately R3.1 billion to R4.2 billion annually.

“Together with the National Treasury, we will continue to engage with relevant institutions, including public and private financial institutions to expand the scheme,” the Minister added.

Eligibility criteria

To qualify for the NSFAS missing middle loan, you should meet the following eligibility criteria:

• Your annual household income should be between R350,000 and R600,000.
• You should be studying or enrolled in a public TVET or university.
• You should be an undergraduate or postgraduate student.
• You should be willing to sign a loan agreement.
• You can apply for the loan in Year 1, 2, 3 etc to continue receiving the funding. Students are expected to obtain an average pass rate of 60%.
• If you obtain an average of 70% or higher within the prescribed time, you will get a 50% reduction on loan upon request.
• The loan will cater for tuition, learning material and accommodation.

The scheme will allocate 70% of funds to science, technology, engineering and mathematics (STEM) programmes (which may be adjusted to include commercial programmes that are in demand in the labour market or entrepreneurial programmes). It will allocate the remaining 30% to humanities programmes.

“NSFAS will provide more details on the loan scheme, including the loan funding guidelines. They will also provide details on the date for the opening of the applications for loan scheme, including methods of applying for the loan,” Nzimande concluded.