Earlier this week, Higher Education Minister Blade Nzimande announced that the National Student Financial Aid Scheme (NSFAS) board will be dissolved with the Financial Aid Scheme also being placed under administration. According to the minister, this had to be done to improve the organisational efficiency of the scheme.
In a statement released, the Minister said:
... the Minister's decision to dissolve the NSFAS board, with immediate effect and place the institution under administration.
NSFAS was previously placed under the administration administration of Dr Randall Carolissen in 2018, for a period of two and a half years.
With the appointment of an Administrator, the Minister would have more direct control over NSFAS as the Administrator covers both the management and board roles - and reports directly to the Minister.
Terms of Administration For NSFAS
The general and specific terms of the Administrator during this period will be to:
- Ensure the effectiveness in terms of the finalisation of funding guidelines of loan for the missing middle.
- Resolving data integration challenges as a matter of urgency, finalising all necessary funding decisions, ensuring reconciliation of funding data between universities and TVET colleges and NSFAS, ensuring that all the necessary agreements are in place and that students are accurately funded and recorded, and making sure that all NSFAS qualifying students receive funding.
- Oversee the opening of the 2025 online applications process (both bursary and loan), ensure that all necessary partnerships for managing the applications process are in place and can be effectively monitored, and develop and manage a communications plan for the application period.
- Develop, in consultation with the Department, universities and TVET colleges, an effective and realistic plan for the 2025 funding cycle and ensure that all parties understand all the roles and responsibilities, and any necessary implementation support is made available as needed.
- Ensure that the entity pays adequate attention to both TVET colleges and universities in all aspects of its core business processes.
- Put in place the necessary management and governance controls to ensure that all risks of the 2025 student funding cycle are appropriately managed, with the support of the Department and institutions as necessary.
- Ensure that adequate plans are in place to make funding decisions at the earliest possible time of the year as close to the period of registration as possible.
- To manage the day -to -day work of the entity, and steer NSFAS to address its operational challenges fully. This will include the strengthening of structures, systems and policies that will ensure good governance and effective management of the core operational mandate of NSFAS.
- To oversee all necessary forensic and other investigations necessary for the effective operation and management of the entity.
- The Administrator will report to the Minister of Higher Education and Training or his delegated officials. Besides other forms of communication and interaction with the Ministry and Department of Higher Education and Training, the Administrator must submit a written report every three months on the progress regarding the above issues.
- The Administrator may appoint technical experts where necessary to assist in the different areas.
- The Administrator will commence duties on the date of publication of this notice.
The minister convened a meeting on Thursday with several stakeholders after several TVET Colleges and Universities failed to comply with the NSFAS deadline of 15 March 2024, for the submission of student registration data.
The failure of institutions to submit registration data prevented the payment of NSFAS allowances to students. This has led to protests around the country. The failure to comply by some TVET Colleges and Universities has contributed to the latest sporadic student protests.
Following this, Nzimande sent the Department of Higher Education and Training (DHET) Director-General to have an urgent meeting with the NSFAS management.
This meeting happened this morning and it was intended to ensure that working with institutions, all outstanding allowances are paid as soon as it is practicable.
Nzimande also met with the NSFAS Board to ensure it remains focused on its mandate to ensure poor and working-class students receive funding for their higher education journey. It was in this meeting that Nzimande revealed that the NSFAS board would be dissolved.
The legal effect of this decision will be communicated tomorrow (12 April 2024), through the Government Gazette.
Student Unions Welcome NSFAS Board Dissolution
South African Union of Students (SAUS) welcomed Nzimande’s decision to dissolve the NSFAS board. They argue that the board has been ineffective in carrying out its mandate and called for restructuring of the scheme.
It is our solemn and painstaking view that the organisation is populated by some of the most inept and useless people to ever live. This can through an empirical observation and the lived experiences of NSFAS beneficiaries be concluded.
SAUS wants to assume they can still expect allowances despite the dissolution of the board. However, NSFAS allowance payments for April may be delayed.
Thousands of students are likely not to receive their allowances on time for April, as was the case for the last few months.
The non-payment of student allowances at the beginning of April 2024 was the first month where Direct Payment Service Providers would be responsible for the disbursement of NSFAS allowances.
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 same contracts were flagged and led former board chair Ernest Khosa to take a leave of absence to allow NSFAS to investigate corruption claims against him.
While NSFAS said they intended to terminate these contracts based on the Werksmans report recommendations, NSFAS anticipated legal challenges could delay their termination
NSFAS's decision to allow these companies to continue disbursing student allowances has remained controversial.
This will however be exacerbated by the fact that NSFAS along with the department persist in contracting illegally appointed and incompetent private service providers to disburse these allowances.
"We have, unfortunately on obtuse ears, made unrelenting calls to NSFAS and the department to scrap these fintech criminals, but to date, they still carry on to terrify our students."
The South African Students Congress (SASCO) echoed SAUS’ sentiments welcoming the dissolution of the board. They too are calling for structural reform at NSFAS.
Furthermore, we emphasise the urgent need for structural transformation at an administrative level within NSFAS. The current system is plagued by inefficiencies and bureaucratic hurdles that impede students' access to financial assistance. SASCO will continue to push for reforms that ensure NSFAS operates in a manner that prioritises the needs of students.
Minister Nzimande is set to brief the media on 14 April 2024 to explain the rationale for dissolving the NSFAS Board. The minister will also reveal further steps arising from this decision.
