In 2022, the National Student Financial Aid Scheme (NSFAS) announced that they'll be using a new direct payment system to disburse NSFAS allowances to students. Now, almost 90% of students at universities have been onboarded.
A statement released by NSFAS read:
After just two months of implementation at universities, the National Student Financial Aid Scheme (NSFAS) is proud to announce that 86% of NSFAS-funded university students have been successfully onboarded onto the scheme's new direct payment method.
They continued to say that this marks a pivotal moment "in our ongoing commitment to providing efficient and timely financial support to our beneficiaries. The scheme is working to address challenges some students have faced in accessing the new system.
"NSFAS remains resolute in its commitment to seamless accessibility of funds, and we are actively working to resolve any remaining barriers that hinder the disbursement of allowances to these students," said NSFAS.
How Many NSFAS Allowance Payments Were Made Through New System At Universities
A total of over R608 000 000 has now been made in NSFAS allowances to a total of almost 358 000 students at universities in South Africa using the new NSFAS direct payment system.
More than R600 000 000 was paid out to nearly 360 000 university students on 31 July 2023, while over 98 000 TVET College students received over R380 000 000 in student allowances on 25 July 2023.
(Source: National Student Financial Aid Scheme)
This new direct payment system has however caused a lot of tension within the higher education space with some calling it another corruption tactic.
Issues With NSFAS Bank Account
The public protector is investigating the awarding of a contract to service providers by the National Student Financial Aid Scheme (NSFAS) to make direct payments to students funded by the scheme.
This comes after Stellenbosch SRC Vice Chairperson, William Sezoe, lodged a complaint asking the public protector to look into the awarding of the contract for the new NSFAS direct payment system.
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.
Sezoe says that in his complaint he highlighted concerns around three critical issues:
- The involvement of NSFAS CEO, Andile Nongogo in the tender awarding process, considering his relationship with the directors of Coinvest, raises legitimate doubts about the fairness and impartiality of the selection procedure.
- The decision to award tenders to companies lacking financial licenses warrants clarification from NSFAS, as this poses serious doubts about their ability to handle students’ funds responsibly; and
- The justifiability of appointing companies charging exorbitant fees to students requires scrutiny, as it affects public funds, especially those allocated for education.
According to investigation findings by the Organisation Undoing Tax Abuse (Outa), all four service providers NSFAS partners with are young and unexperienced companies. Outa further revealed that the companies were also not registered as Financial Service Providers at the Financial Sector Conduct Authority (FSCA).
The investigation also found that NSFAS CEO, Andile Nongogo had an alleged “business relationship” with the directors of one of the service providers – Coinvest.
There have also been reports of students being charged exorbitant amounts in bank charges.
NSFAS is set to soon host a media briefing to discuss issues with the direct payment system, the large number of students which were defunded, student accommodation and 2024 NSFAS applications.
