In light of recent challenges students face with the disbursement of the National Student Financial Aid Scheme (NSFAS) allowances, ActionSA has decided to take legal action challenging the awarding of the contracts for the direct payment of allowances.
Previously, the bursary scheme paid student allowances through the financial divisions of all universities. However, NSFAS has now 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.
The party believes that the decision to outsource the job to service providers was irrational and seeks the courts assistance to set aside the contract as they allege that the ‘service providers are ‘Ill equipped’ to do the job.
ActionSA Western Cape Students Chairperson, Matthew George said that they would approach the high court to not only declare the decision irrational, but also to ask the court to set aside the awarding of the contract.
George said the party believed it was in the best interest of taxpayers and students to launch the challenge.
We firmly believe that it is in the best interest of the taxpayer and students, we embark on this unprecedented legal action. Our main focus is to prevent NSFAS from becoming a feeding trough for unscrupulous tenderpreneurs whose greed undermines the well-being of students.
Students Find The New System Problematic
According to NSFAS the new system was implemented to ensure that funded students receive their allowances for food, transportation, and other living expenses in a secure and seamless way.
However, since the introduction of the direct payment system, students have complained about exorbitant bank charges and the inability to access their allowances.
In addition, some students have already expressed frustration noting that the onboarding process has been everything but ‘seamless’, with some questioning communication around the new system and why it was implemented at universities in the middle of the academic year.
George alleged the “NSFAS bank accounts” provided by four inexperienced service providers offer significantly more expensive solutions than those offered by four of the largest commercial banks, all of whom were unsuccessful bidders.
On account of several problems raised by students, it was clear NSFAS and the four appointed companies did not have the capacity to implement the migration, George adds.
Furthermore, he says they received multiple submissions through their NSFAS complaints database indicating transaction fees charged exceed what can be considered reasonable, in addition to the account fee already debited, adding to the financial strain on students. Students who make NSFAS applications online this year could be affected.
Secondly, in recognising the impact on nearly 1 million students affected by this rushed and flawed migration to the new system, it is widely agreed that NSFAS neglected to conduct thorough consultations.
He continued, “This deprived key stakeholders of the opportunity to provide valuable inputs that could have aided in creating a clear migration plan. As a result, there is widespread confusion among students and university administrators.”
In addition, some students had not received their full allowances for more than two weeks due to a flawed onboarding/registration process, causing inconvenience and, more significantly, hardship for those who depend on timely access to their allowances.
Parliament To Prioritise NSFAS Related Concerns
Meanwhile the Democratic Alliance has requested the portfolio committee on higher education chairperson, Nompendulo Mkhatshwa, to fastrack a meeting with NSFAS.
The DA has written to the chairperson of the parliamentary portfolio committee to request a rescheduling of the committee programme to prioritise holding the National Student Financial Aid Scheme (NSFAS) to account on their controversial direct payment system.
DA MP Chantal King said that while they welcome the idea of a direct payment system as a “secure and student-centred approach” the way that NSFAS has chosen to implement the system, is highly worrisome.
The party claims that “companies chosen to implement the NSFAS direct payment system are young and inexperienced,” as many experienced banks reportedly applied for the bid but were unsuccessful.
King noted, "It is imperative that public funds, particularly those allocated for education, be utilised transparently and efficiently."
The DA wants NSFAS to be held accountable for the “high” costs charged by its chosen service providers and have urged the scheme to provide clear explanations on the implementation of the new system and the criteria used when selecting service providers.
