Giving an update on the developments with the funding scheme on Tuesday, Minister Nzimande insisted that the National Student Financial Aid Scheme (NSFAS) is not in crisis despite the many challenges it experiences.
Since the start of the year the scheme has been riddled with complaints over student funding failures affecting thousands of students. There have been student protests at universities across the country and even at the Parliament buildings relating to unpaid allowances, incorrectly defunding students and calling for the new direct payment system to be scrapped.
Nzimande stressed, "I must upfront indicate that Nsfas, insofar as it successfully services the needs to the vast majority of poor students, is not in a crisis as many of our detractors would want the public to believe".
He also criticised “detractors” and said all they are trying to accomplish is to “discredit the biggest student funding agency in the world.”
In fact, it is for this reason that our detractors want to project Nsfas as being in a crisis because they want to discredit one of the most successful schemes of this ANC-led government, we may be having glitches here and there, but he said the scheme is not in a crisis.
The minister said the scheme has made strides with the new direct payment system, which has led to student protests at several universities.
Nsfas funding challenges
The introduction of the new direct payment system has been mired in controversy, with students complaining about excessive bank charges, system glitches, inaccessibility of service providers and lack of clarity on how to access funds.
On fee charges, Nzimande said he had asked NSFAS to relook the bank charges levied by the service providers that have been contracted to pay student allowances.
NSFAS 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.
He said he was briefed that NSFAS negotiated for a R12 monthly bank charge “which excluded money transfer costs to other banks”.
I then directed that NSFAS relook at the entire bank charges regime to find possible measures to further reduce these costs for our beneficiaries. I await the board’s final determination in this regard.
Meanwhile, Nzimande said that he was awaiting a final report on the NSFAS investigations into the process of appointing the four companies “after public allegations on the process of their appointment”.
We are not hiding anything. NSFAS has undertaken an investigation on its own to make sure that the allegations being made are investigated.
“As a result of the allegations and the alleged claimed involvement of the NSFAS CEO, I have noted the decision by the board to place Mr Nongogo on leave of absence while investigations by an independent legal firm are ongoing into these allegations.”
He said they were not saying that Nongogo was guilty, adding: “The board has said ‘just step aside while we investigate this matter”.
Nzimande on Students defrauding Nsfas
Speaking on the issue of defunding students, Nzimande said he has recommended that criminal charges be laid against students and parents who unduly benefited from NSFAS.
Earlier this year, the bursary scheme terminated funding for over 40,000 students who they deemed were not deserving. After NSFAS re-evaluated the applications, 14,703 applications were reinstated, while 31,224 remained disqualified.
Nsfas explained that the decision to commence with a remedial process of defunding students came in response to the funding that they paid more than R5 billion to students who did not meet the eligibility criteria but received funding.
“I said [to NSFAS], implement a 24-hour call centre and initiate criminal and legal action against all students and parents who have been defrauding NSFAS.”
Furthermore, Nzimande said he had given additional directives to the board members and directed the board to immediately:
- Implement their redesign Information Communication Information (ICT) system, which leverage modern technologies and capabilities in order to deliver the NSFAS mandate seamlessly;
- Review all their processes, operations and their allowances disbursement model;
- Review their overall governance and management design to ensure the full execution of their mandate;
- Implement a new performance management and accountability framework in a bid to establish a high-performance culture within the organization;
- Improve their stakeholder, media and communication relations;
“I have said to NSFAS, respond in the shortest possible time and every single enquiry must be responded to,” he adds.
