By Vivan Warby
A public-private partnership with government aims to encourage long-term savings for education, as well as access to Further Education Training (FET) colleges and universities.
Delivering the Department of Education?s Budget Speech in parliament , Minister Naledi Pandor said the fund, to be known as the Fundisa Fund, was a public-private partnership between the department and the Association of Collective Investments.
The scheme is a long-term collective investment in which the state will match the regular monthly savings that parents invest for their children?s education at university or FET colleges.
"It will afford South Africans an opportunity to plan and save for the post-secondary education of their children,' said the minister. The three-year pilot project of the fund was unveiled this week.
"The intention is to encourage education saving and provide state support to assist families that can put aside small amounts for future education purposes. This project will assist us to widen access to further and higher education.'
Minister Pandor said that more and more people in the country aspire to enter post-secondary education.
"We need to create diverse and flexible mechanisms to support this demand,' she said. A significant barrier to access has always been financial assistance.
The National Student Financial Aid Scheme (NSFAS) had provided welcome relief, but more is needed to be done to address gaps in funding.
"It?s not just a social need to give more people from more diverse backgrounds access to higher education. It?s an economic necessity,' Ms Pandor said.
The Fundisa Fund is classified as a domestic fixed interest income category fund and will be managed by the Association of Collective Investments in partnership with NSFAS.
"When I met with the representatives of the Association of Collective Investments, I agreed to the partnership on condition that they secure seed contributions to Fundisa from the private sector.
"I?m pleased to inform you that this has indeed happened and a number of pledges have been made,' the minister said.
The members of the Association of Collective Investments will also cover all the administrative and advocacy costs of the pilot, said Minister Pandor.
From the side of government, the NSFAS board has agreed to set aside R20 million towards the matching grant component of Fundisa.
"If the pilot scheme is a success, we?ll be able to expand Fundisa?s reach. "We will not see the impact of Fundisa for many years, but when children begin to redeem their Fundisa funds, we?ll be able to see how far-sighted we?ve been.
"In future, I hope that qualifying families will be able to draw on a combination of their Fundisa savings and NSFAS funding to support their children?s higher education.
"It is a future that will bring new hope to many of our people,' she concluded.