NSFAS Chairperson Resigned Hours Before Board Was Fired

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Hours before the NSFAS board was dissolved, the board chair handed in his resignation. This comes after several challenging months for NSFAS. 

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Higher Education Minister Blade Nzimande has confirmed that National Student Financial Aid Scheme (NSFAS) board chair Ernest Khosa has resigned. This comes after several allegations of improper conduct were made against him and amid turmoil at the financial aid scheme. 

In a statement released on Thursday, Nzimande accepted Khosa’s resignation as a member of the NSFAS board and an employee of NSFAS. The minister took the opportunity to wish Khosa well in his future endeavours. 

The Minister also wishes to announce the resignation of Mr. Ernest Khosa as chairperson of the NSFAS Board and an employee of NSFAS. The Minister has accepted Mr Khosa’s resignation and wishes him well in his future endeavours.

In the weeks before his resignation, Khosa had taken a leave of absence to allow NSFAS to investigate corruption claims made against him

Khosa’s notice came a few weeks after the Organisation Undoing Tax Abuse (OUTA) released audio recordings suggesting he, along with Minister  Nzimande and the South African Communist Party (SACP) received kickbacks related to a lucrative tender contract, suggestions that they deny. Nzimande said the recordings were based on gossip. 

The Minister views the allegations contained in this leaked report as reckless and largely based on gossip and are intended to undermine a smooth start to the 2024 academic year.

In exchange for these payments, the service providers would be awarded lucrative tenders to facilitate NSFAS Allowance payments using the Direct Payment System. 

Nzimande and Khosa both denied any suggestions that they received money for the awarding of the contract.

At the time, NSFAS’ Board described Khosa’s decision to take leave as an honourable and responsible step toward promoting corporate governance, transparency, and accountability at NSFAS. 

The board indicated that Khosa’s decision should not be viewed as an admission of guilt. 

NSFAS Board Dissolved 

Just hours after Nzimande accepted Khosa's resignation, the entire NSFAS board has been dissolved. This follows numerous calls from stakeholders who are demanding accountability for NSFAS challenges. 

NSFAS has come under immense pressure recently following the non-payment of allowances to students. 

The non-payment of student allowances in April 2024 is extremely concerning as it was the first month where Direct Payment Service Providers would be responsible for the disbursement of NSFAS allowances. Institutions received upfront payments from NSFAS to facilitate allowance payments at the beginning of the academic year. 

The direct allowance payment system has been a major challenge for the scheme. 

First introduced in 2022, the implementation of the NSFAS bank account has faced several challenges. Students marched to parliament in 2023 due to high bank charges associated with the use of NSFAS bank accounts. 

Later in 2023, the NSFAS CEO was fired over a potential conflict of interest in choosing the service provided to facilitate direct payments. 

These companies face contract termination based on the Werksmans report recommendation, but NSFAS anticipates legal challenges could delay the termination of the contracts. These same contracts were flagged and led former board chair Khosa to take a leave of absence. 

NSFAS's decision to allow these companies to continue disbursing student allowances has remained controversial. 

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The arguments around NSFAS allowances for students have been escalating in recent days, with university students calling for a national shutdown. Taking action to try to alleviate the problem, Minister Blade Nzimande announced late on Thursday night that the entire Board of NSFAS has been removed, which will allow the Minister to exert more direct control.

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