The Portfolio Committee on Higher Education has received its first report from the National Student Financial Aid Scheme (NSFAS) since it was placed under administration in April 2024. According to the report, NSFAS has made improvements in managing allowance payments.
NSFAS provides comprehensive bursaries and student loans to deserving learners enrolled in approved courses at universities and TVET colleges. This includes money for tuition and registration fees as well as several allowances for food, accommodation and learning materials.
NSFAS was placed under administration due to failures in distributing funds to disadvantaged students, the inability to implement recommendations from the Werksmans report, and a significant backlog of appeals.
Deputy Minister of Higher Education Buti Manamela highlighted the importance of NSFAS in providing critical funding for deserving students:
There's a lot of expectation on the part of the students. Students expect that if they qualify for NSFAS, for student funding, they will be paid on time, their allowances, their accommodation [and] their tuition fees.
Following the administration’s intervention, NSFAS introduced new payment systems to ensure timely distribution of allowances to students.
Allowance Payment Improvements
NSFAS reported that the new system has significantly reduced the cost of distributing allowances to TVET College students. Previously, each transaction cost NSFAS R22 and students R10, making the process both expensive and inefficient.
Since implementing the new payment system for TVET college students in May, NSFAS has not received any complaints about non-payment of allowances.
By transitioning to direct payments through its internal banking system, NSFAS has reduced transaction costs to less than R1 per payment. This change has not only stabilized the system but also decreased student complaints.
While these improvements are welcomed, NSFAS administrator Freeman Nomvalo acknowledged that there are still challenges to overcome:
We're not where we ought to be; we still have challenges to resolve. We still have legacy issues that are a pain to students [and] a pain to society, [but] we are committed to resolving them.
Nomvalo emphasized that timely payment to accommodation providers remains a significant concern for the scheme. Some students have faced eviction due to unpaid accommodation allowances:
The burning issue is that we still need to pay on time. For instance, last month, as of now in August, we were supposed to pay on the 31st of July, but we couldn't. We ended up paying at the beginning of August.
"When we pay that late, accommodation providers' debit orders, as [they have said], bounce, their credit score with their financiers gets affected."
