The National Student Financial Aid Scheme (NSFAS) celebrates the successful onboarding of almost 90% of NSFAS-funded students to the scheme's new direct payment method.
What is the new direct payment method?
The new payment method, which operates as a bank account and makes use of a Mastercard as well, was implemented in an effort to streamline the payment of NSFAS allowances to students, and give them confidence that allowances would be paid, as well as more control over their money.
The NSFAS bank account was introduced in collaboration with third-party financial service providers, namely eZaga, Coinvest, Morocco and Tenet Technology. NSFAS has called on its funded students to register or onboard each of the above-mention FSPs.
As of June 2023, NSFAS started paying allowances directly to students using their new direct allowance payment system. However, the process has not been entirely smooth-sailing.
Breakdown of university allowance payments made through the new direct method
Just over 34 000 students at the Tshwane University of Technology (TUT) have received around R70 million in total of NSFAS allowances via the new payment method.
TUT is the university with the most beneficiaries onboarded to the new NSFAS Mastercard and bank accounts, while Rhodes University has the least amount of students onboarded (784), who have received R1 300 200 in NSFAS allowances.
Challenges with the new direct NSFAS payment method
Less than two months have passed since university students began using the NSFAS bank account and several challenges have been raised by stakeholders.
Since its implementation there have already been a number of complaints about the system, including students not receiving their funds, exorbitant bank charges, glitches, and unauthorised access resulting in loss of funds.
Some students have expressed frustration, noting that the onboarding process has been everything but ‘seamless’, with some questioning communication around the new system and why it was introduced at universities in the middle of the academic year.
However, due to the persistent challenges and frustrations amongst students, protests have erupted.
Students began protesting last week, over a NSFAS decision they label as "rushed' and "full of glitches and delays". The protests have escalated, with students demanding that a representative of the Department of Higher Education and Training (DHET), preferably Minister Blade Nzimande, make an appearance and address them.
One particular grievance is that of the bursary scheme wrongfully defunding many eligible students, leaving them immediately stranded.
Related Article: How To Login To MyNsfas Student Portal
The protests have been increasing in intensity over the past two or three weeks, and have now reached its peak, with over a thousand students gathered outside the DHET's headquarters.
Additionally, there have been suspicions surrounding the third-party financial service providers recruited for the new payment system, which has prompted an investigation by the South African Public Protector.
This comes after Stellenbosch SRC Vice Chairperson, William Sezoe, lodged a complaint asking the public protector to look into the awarding of the contract for the new NSFAS direct payment system.
Sezoe explains:
I have last week written to the public protector to investigate the National Student Financial Aid Scheme direct payment system and in particular the involvement of the CEO of NSFAS with the awarding of the specific tender.
Sezoe says that in his complaint,
According to investigation findings by the Organisation Undoing Tax Abuse (Outa), all four service providers NSFAS partners with are young and unexperienced companies. Outa further revealed that the companies were also not registered as Financial Service Providers at the Financial Sector Conduct Authority (FSCA).
The investigation also found that NSFAS CEO, Andile Nongogo had an alleged “business relationship” with the directors of one of the service providers – Coinvest.
Sezoe noted:
It must be investigated whether Nongogo as the CEO of NSFAS declared his relationship with the directors of Coinvest in particular and whether his relationship with the directors could had an influence in the successful awarding of the tender.
Concerns were highlighted around three critical issues:
- The involvement of NSFAS CEO, Andile Nongogo in the tender awarding process, considering his relationship with the directors of Coinvest, raises legitimate doubts about the fairness and impartiality of the selection procedure.
- The decision to award tenders to companies lacking financial licenses warrants clarification from NSFAS, as this poses serious doubts about their ability to handle students’ funds responsibly; and
- The justifiability of appointing companies charging exorbitant fees to students requires scrutiny, as it affects public funds, especially those allocated for education.
Sezoe adds, “It is unjustifiable that students have to cut their allowances to access them and be able to live in a country where the cost of living is already high.”
It is unacceptable that NSFAS is charging students they ought to serve. It is unacceptable, hence we will await the outcome of the investigation and the public protector must make sure education funds are protected.
Many have welcomed the public protectors decision to investigate the direct payment system and have noted that should they find evidence of tender fraud, swift and decisive consequence management is expected.
NSFAS' response
NSFAS recently released a statement acknowledging the challenges associated with the new payment method, despite the "milestone" of 86% of funded students making use of their NSFAS bank accounts and Mastercards to access their allowances.
While we observe this milestone, we are cognisant that challenges persist. Approximately 14% of students are yet to access the full benefits of their bursary and this new venture. NSFAS remains resolute in its commitment to seamless accessibility of funds, and we are actively working to resolve any remaining barriers that hinder the disbursement of allowances to these students.
The financial aid scheme has assured students that officials have been disbursed to campuses around the country to assist them with challenges related to the payment system. This includes assisting students to onboard themselves onto the payment system, and allocating students with NSFAS bank cards.
The scheme added that as part of their dedication to "accountability and transparency", open communication with stakeholders is encouraged as the scheme works to "address all concerns, feedback, and suggestions from students, parents, institutions, and the public at large."
