Minister Reaffirms His Support For NSFAS Direct Payment System Despite Issues

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The government’s bursary scheme has received tons of backlash from students across the country over several challenges involving student allowances. These concerns have resulted in calls for government intervention.


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Last week Higher Education Minister Blade Nzimande issued a joint statement with the National Student Financial Aid Scheme (NSFAS) to update the public on funding for the 2023 academic year and the disbursement of allowances to students. 

This comes after students at several institutions across the country engaged in protest action against the new direct payment system and the alleged incorrectly defunding of beneficiaries.

Nzimande condemned recent reported incidents of violent protests that have been taking place in some universities.

"Violence will never justify or cannot be associated with any legitimate forms of protest and should be condemned by all, including by student leaders," he said.

New Payment System

The protests were aimed at numerous issues, but mainly delays in distributing student allowance, a problematic direct payment system and the higher bank charges the new system came with.

Despite concerns raised on payment system challenges, Minister Nzimande reaffirmed his support for the implementation of the new NSFAS student-centred model.

He said the model was about placing students' needs at the centre of the scheme's operations, while also streamlining the process that affected the disbursement of funds for tuition, transport, food, and accommodation.

The Student-Centred Model reduces too many role players in the payment of allowances to students.

Nzimande has called on stakeholders to provide their support for NSFAS’ implementation of a student-centred model.

According to NSFAS a total of R608 601 526 has been paid to NSFAS qualifying beneficiaries at public universities, while a total of R383 671 046 was paid to TVET colleges for the month of August alone.

Related Article: How To Login To MyNsfas Student Portal

Exorbitant Bank Charges

The new direct payment allowance payment system was implemented at universities around South Africa a few months ago. To execute the new payment system, NSFAS partnered with four banking service providers to bring the new payment solution to students.

These service providers include Tenet Technology, Coinvest Africa, Ezaga Holdings and Norraco Corporation.

However, students have complained about exorbitant bank charges being charged by service providers and the inability to access their allowances.

Nzimande confirmed that students will be charged a monthly banking fee of R12 to use their NSFAS bank account.

In addition to this, this will be required to pay money transfer costs when transferring money to other banking accounts and pay additional banking fees. 

Bank charges are inevitable, however NSFAS negotiated for a R12 monthly bank charge, which excludes money transfer costs to other banks. In addition, NSFAS beneficiaries can use their banks cards anywhere within South Africa at any retailers and ATMs

Direct Payment Solutions

NSFAS Board Chairperson Ernest Khosa acknowledged that, as with any introduction of new systems, there have been some teething issues and genuine cases of students who have not been able to access their allowances via the new solution.

“We have also noted that closer to payment dates, the system experiences technical glitches caused by high internet traffic due to students registering at the same time. Onboarding for TVET college students continues on an ongoing basis as new students enrol,” Khosa said.

He said this can be mainly attributed to issues of data integration with institutions and system glitches caused by too many students/traffic seeking to register onto the system at the same time. 

We have also had reports of students struggling with the authentication process and requiring assistance, hence we swiftly deployed officials across various campuses.

Furthermore, the Minister also called on all students to onboard themselves onto the new allowance payment system which will allow them to access their allowances. 

NSFAS noted that some students have been unable to authenticate themselves on the service provider’s systems due to connectivity issues. As a result, the scheme has sent teams to campuses to assist students with their authentication and verification process.

NSFAS Defunds Thousands Of Students 

During 2023, NSFAS have defunded more than 40,000 students said to have been undeserving and dishonest. Dishonest students had their funding revoked and face several consequences for defrauding NSFAS

NSFAS teamed up with third-party entities to assist with the verification of student information. These entities include the South African Revenue Service (SARS), state security agencies and the Department of Home Affairs (DHA). 

The meeting agreed that NSFAS must continue to work with other government entities such as the South African Social Security Agency (SASSA) South African Revenue Services (SARS) and the Department of Home affairs to verify information submitted and to ensure the correct processing of students' applications.

Meanwhile, the NSFAS board revealed that after re-evaluation of funding, 14 703 bursary applications were reinstated and 31 224 remained disqualified.

These students reportedly do not meet the NSFAS bursary eligibility criteria set by NSFAS or exceed the N+Rule.

The N+ rule refers to the number of years students will receive funding to obtain a qualification. The N+2 rule currently used makes funding provision to students for a minimum number of years allocated to the qualification “N” plus an additional two year N+2.

The Board confirmed that all those who were disqualified from receiving funding have been given an opportunity to appeal and submit supporting documents. These NSFAS appeals are subject to funding availability. 

Suggested Article:

nnsfas board chairperson ernest khosa

On the backdrop of weeks of student unrest over the challenges with the direct payment system implemented by the National Student Financial Aid Scheme, the bursary scheme has now provided some clarity regarding the payment system.

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