The National Student Financial Aid Scheme (NSFAS) will appeal a recent court ruling that restored eZaga's contract to distribute student allowances.
NSFAS provides comprehensive bursaries and student loans to deserving learners enrolled in approved courses at universities and TVET colleges. This includes money for tuition and registration fees as well as several allowances for food, accommodation and learning materials.
In 2023, NSFAS hired four service providers to facilitate the payment of allowances to students. However, an investigation by Werksmans Attorneys uncovered potential irregularities in the Bid, which awarded contracts for the NSFAS direct payment system.
Werksmans Attorneys raised concerns about possible connections between Former NSFAS CEO Andile Nongogo and Fintech companies that distributed student allowances. The report also flagged the CEO's involvement in presenting to the committee that evaluated bids and potential conflicts of interest.
These findings led Werksmans to recommend terminating the contracts, a decision the NSFAS board initially adopted. However, their subsequent failure to act on this recommendation resulted in their dissolution by former Higher Education Minister Blade Nzimande.
After the board’s dissolution, NSFAS has taken active steps to terminate the contracts of service providers.
In June, NSFAS was given the green light to implement the recommendations of the Werksmans report after the Western Cape High Court dismissed a request by eZaga Holdings to block its implementation. However, the same court handed down a judgement on Monday which in theory restored eZaga’s contract to distribute student allowances.
NSFAS argues the court's decision only considered NSFAS's actions after an investigation conducted by Werksmans attorneys flagged irregularities in awarding the contract in the first place.
NSFAS wishes to emphasise that this judgement is limited to the circumstances surrounding the actions taken by NSFAS post the Werksmans Report, which recommended that the contract with eZaga and others be terminated based on procurement irregularities.
NSFAS will appeal the most recent court decision as well as continue to pursue its case at the Special Tribunal to set aside these contracts.
“We are appealing this judgement and continue to pursue our case at the Special Tribunal, which directly addresses the alleged procurement irregularities,” declared NSFAS
The SIU and NSFAS have applied to the Special Tribunal to review and set aside these contracts and to have the Tribunal declare them invalid and unlawful.
Students Support NSFAS Termination Of Service Provider Contracts
The Economic Freedom Fighters Students' Command (EFFSC) has commended NSFAS for taking steps to terminate the contracts of direct allowance payment service providers.
This decision is a step in the right direction towards ensuring accountability and transparency in the management of student funds, and total eradication of any inconveniences towards students.
The union has accused these companies of causing delays, mismanagement, and unfair fees.
The EFFSC has long been concerned about the inefficiencies and delays caused by these dodgy direct payment service providers. These providers were not only hindered, leading to significant delays in disbursing payments but also exploited students by charging them exorbitant transaction fees to transfer money to their bank accounts.
The EFFSC has called for a state-owned bank to handle student funds directly.
