Higher Education Minister Blade Nzimande is adamant that there is no crisis at the National Student Financial Aid Scheme (NSFAS). Challenges regarding the scheme's newly introduced direct allowance payment system are causing concern among students.
In 2022, NSFAS introduced a direct payment system for allowances. This system was introduced to alleviate payment delays and provide NSFAS-funded students with the confidence that payments would be made on time.
The financial aid scheme also declared that students will have access to value-added services with the system.
The NSFAS Bank Account system was first implemented at Technical and Vocational Education and Training (TVET) colleges last year and followed by its implementation at universities in 2023.
However, since its implementation at universities, several challenges have been experienced by students. This includes the late payment of allowances, excessive bank charges and difficulties with the student onboarding processing themselves onto the system.
Members of parliament slammed NSFAS for failing to adequately support students who received their allowances late in September 2023.
Nzimande says the onboarding process for the NSFAS bank account at TVET colleges is ongoing as they have multiple academic terms. Students can apply for NSFAS funding at the beginning of Semesters and Trimesters throughout the year.
The minister indicated that the majority of NSFAS-funded students had registered and subsequently onboarded with the relevant service provider for the NSFAS bank account.
Only four of the country’s twenty-six universities recorded onboarding percentage among students below 90%.
The above statistics clearly demonstrates my previous point that NSFAS – insofar as it services the needs of the vast majority of eligible students across the system – is not in crisis.
However, the onboarding rate at the University of South Africa (Unisa) and the University of Fort Hare (UFH) is a cause for concern. Only 67% of NSFAS-funded students attending Unisa have onboarded themselves while 56% of UFH NSFAS-funded students have registered for the NSFAS bank account.
Nzimande says NSFAS institutional support teams will be deployed to improve the onboarding processes at institutions to increase the number of students registered for the NSFAS bank account. After students register for the NSFAS bank account they will begin receiving their allowances.
The minister also called on students to ensure they onboard themselves onto the NSFAS bank account with the relevant service provider so they receive their allowances.
NSFAS partnered with four service providers to facilitate the NSFAS bank account direct payment system. This includes eZaga, Coinvest, Norocco and Tenet Technologies. Students must register with the service provider allocated to the institution they attend.
I therefore once more would like to urge all our beneficiaries who have not been onboarded (registered) or converted onto the new payment system to urgently do so in order to enable NSFAS to pay their allowances without any further delay.
Nzimande also announced that NSFAS is conducting investigations into the appointment of direct payment service providers.
Damning allegations were made against NSFAS regarding the appointment of service providers. The financial aid scheme was also criticised for adjusting the tender requirements which allowed for the appointment of the service providers.
I am currently awaiting for the final report on the NSFAS investigations into the process of the appointment of the four (4) Direct Payments Program partners following public allegations on the process of their appointment.
Nzimande also directed NSFAS to reevaluate the bank charges regime to find possible measures to further reduce these costs for students.
The Organisation Undoing Tax Abuse (OUTA) did a comparison between bank fees being charged by four of South Africa’s commercial banks and the bank fees students are being charged by the NSFAS-appointed service providers. The comparison indicates that students were paying higher fees than they would have paid if commercial bank rates were applied to the NSFAS bank account.