Lectures get under way but NMMU’s financial woes mount

While the first day of lectures at NMMU started smoothly yesterday, the university is in a dire financial situation, with more than R100-million in outstanding student fees still owed.

Coupled with a bleak financial forecast for the next three years, a number of students still do not know if their National Student Financial Aid Scheme (NSFAS) applications will be approved and if they can start their studies.

NMMU finance director Michael Monaghan reiterated that the university would not be writing off any debt, which meant the outstanding fees would roll over to the expenses budget and further undermine its coffers.

Meanwhile, the NSFAS has made R9.9-billion available to students whose families earn under R244 000 a year. Of that amount, R285-million has been allocated for NMMU students.

Monaghan said the outstanding fees for last year alone were sitting at R78-million this month, almost triple the total outstanding amount owed in February last year.

An additional R34-million was paid by NMMU to students who did not receive NSFAS funding last year.

A further R25-million of the university’s own funds was used to support students who could not afford textbooks, accommodation and food.

“The university is not increasing reserves – we need a 5% to 10% surplus to increase reserves,” Monaghan said.

NMMU’s current operational budget was in a R68-million deficit.

“We are hopeful that students will be put on the NSFAS, which would reduce the deficit,” he said.

A 23-year-old second-year education student, who did not want to be named, said she was frustrated that she did not yet know what her NSFAS status was. “I was unable to register as the NSFAS was unclear on my status and now I can’t attend lectures [because] I don’t know what my timetable is,” she said.

“I am panicking because they [NSFAS] have not been forthcoming.

“It is stressful.” Monaghan said an additional R78.9-million was allocated to NMMU yesterday to assist students who were benefiting from the NSFAS for the first time.

Adding to the cash-strapped situation, the university forked out nearly R60-million in assisting financially needy and academically deserving students after the #FeesMustFall protests late last year.

NMMU spokeswoman Zandile Mbabela said: “NMMU has always tried to ensure that academically deserving students are not prevented from accessing higher education because of financial constraints.

“As such, various financial aid options are made available to students annually, with the collaboration with the NSFAS remaining the key funding option for needy students.”

NMMU’s predicted operational budget for the next three years reflects a worsening situation, with a R73-million deficit forecast for next year – amounting to a R13-million deficit after using all investment income – and R53-million for 2019.

After using all of NMMU’s investment income, the 2019 deficit is projected to be R3-million.

Adding to the already difficult cash-flow situation, some parents and students were playing a waiting game, Monaghan said.

“I think a lot [are] waiting to see what the government does next and if there will be any more concessions,” he said.

As NMMU whittles down its reserves, it faces serious financial trouble.

“We are dependent on students paying their fees,” Monaghan said, adding that student fees usually generated more than R600-million in income.

Cost-cutting measures being implemented included weighing the viability of some academic programmes and evaluating whether certain projects were both academically and financially sustainable.

While NMMU would continue to assist existing students being helped through the Zero Extended Family Contribution (Zero EFC) programme, which saw it fork out millions in assistance to students who did not receive funds from the NSFAS last year, it would not be adding any new students to the programme.

NSFAS national spokesman Kagisho Mamabolo said the scheme had already approved and funded more than 245 618 students for this academic year.

“The vast majority of students who qualify for financial assistance will be able to register this week,” he said.

Although the demand for financial aid was far greater than the resources available, the NSFAS had already made an upfront payment of R1.3-billion for registration to the universities.

“There is an understanding between the NSFAS and universities to continue to work together to assist students who are affected,” Mamabolo said.