The Parliamentary Committee for Higher Education, Science and Innovation was scathing in their criticism of the National Student Financial Aid Scheme (NSFAS) for failing to adequately support students.
They said NSFAS’ allowance payment failures led to financial hardship and frustration as thousands did not receive allowance payments which meant they could not cover their expenses.
NSFAS provides bursaries to students from poor and working-background which allow them to attend a tertiary education institution and obtain a qualification. The NSFAS bursary includes tuition fees, registration fees and allowances.
In 2022, NSFAS introduced a direct payment system for allowances. This system was introduced to alleviate payment delays and provide NSFAS-funded students with access to value-added services with the system.
The direct payment system was introduced at Technical and Vocational Education and Training (TVET) colleges in 2022 and at Universities in 2023.
Since the NSFAS bank account system’s implementation at universities, several challenges have plagued students. This includes the late payments of allowances, excessive bank charges and difficulties using the system.
NSFAS partnered with four service providers to facilitate the NSFAS bank account direct payment system. This includes eZaga, Coinvest, Norocco and Tenet Technologies.
Members of parliament questioned the legitimacy of the selection process which resulted in these companies being appointed to pay NSFAS allowances to students. They also criticised NSFAS for changing its requirements for the tender.
NSFAS says questions about the legitimacy of the selection process were only readied when big banks' bids were rejected.
NSFAS Defends Allowance Payment System
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.
Their comparison indicated that students were paying higher fees than they would have paid if commercial bank rates were applied to the NSFAS bank account.
Higher education minister Blade Nzimande defended NSFAS saying that bank charges are inevitable and said the financial aid scheme had negotiated a lower account fee for students.
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 bank cards anywhere within South Africa at any retailer and ATMs
The Parliamentary Committee supported NSFAS's new direct payment system despite concerns about its capacity to implement it effectively. Issues had arisen, including incorrect payments and delayed allowances, without timely communication to students.
NSFAS announced the establishment of two teams to visit various institutions to resolve allowance payment issues. NSFAS says their records showed that it had paid students, however, there have been complaints from students who claimed they had not received NSFAS allowances.
These teams will start their work with Rhodes University and Wits University, which faced protests from students regarding the non-payment of allowances. The teams have a ten-day deadline to assist financial aid offices, address student concerns and present their funding to the board.
The NSFAS board intends to use this information to formulate an appropriate response.
NSFAS CEO Corruption Allegations
Damning allegations were also made against NSFAS CEO Andile Nongogo. Nongogo faces corruption allegations related to his previous work at Services SETA (SSETA). These allegations further raise concerns about potential improper practices in the awarding of bids at NSFAS.
NSFAS’ board says they did not find Nongogo of any wrongdoing, they did ask him to take a leave of absence pending investigations. An investigation firm and lawyers were appointed, with preliminary and final reports expected soon.