Members of Parliament criticised the National Student Financial Aid Scheme (NSFAS) for its failure to adequately support students, leading many to face financial hardship and frustration. This as thousands of students did not receive allowance payments which meant they could not cover their expenses.
NSFAS provides comprehensive bursaries to students which include tuition fees, registration fees and allowances. These allowances include an accommodation allowance, a learning material allowance and a meal allowance.
In 2022, NSFAS introduced a direct payment system for allowances. This system was purportedly 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, several challenges have been experienced by students. This includes the late payment of allowances, excessive bank charges and difficulties in using the system.
Members of parliament are concerned about the appointment of four service providers to distribute funds to universities and TVET colleges. They questioned the legitimacy of the selection process and criticised NSFAS for changing its requirements for the tender.
NSFAS defended its direct payment system and argued that controversy arose when big banks' bids were rejected.
Questions were also asked regarding allegations against NSFAS's CEO Andile Nongogo outlined in an OUTA report.
The NSFAS Board says they did not find Nongogo at fault but asked him to take a leave of absence pending investigations. An investigation firm and lawyers were appointed, with preliminary and final reports expected soon.
The 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 had disbursed R32 billion to universities and colleges, with a budget below R50 billion, but significantly larger than the revenues of big banks. The concept of direct payments initially had universal acceptance, but controversy emerged when non-bank providers were selected.
NSFAS announced they established two teams to visit various institutions, starting with Rhodes University and Wits University, which had recently seen protests. Each team had a ten-day deadline to assist financial aid offices, address student concerns, and report their findings to the Board.
The NSFAS Board intends to use this information to formulate an appropriate response.
The board also acknowledged that such strategies could have significant implications and potentially lead to instability and resentment within the organisation.
