Parliament Demands Answers As To Why NSFAS Wrongfully Defunded Over 14 000 Students

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More than a million students receive funding from the National Student Financial Aid Scheme (NSFAS). However the scheme recently initiated a remedial process where students found to have been funded based on incorrect information are defunded instantly.


Earlier this month the National Student Financial Aid Scheme (NSFAS) briefed the parliamentary committee for Higher Education on a number of issues namely its disbursement of allowances to students, the roll-out of its new direct-payment system, and its query system.

This follows backlash the scheme received regarding student funding, particularly delays in distributing student allowances, the new NSFAS banking system as well incorrectly defunding thousands of students.

During the briefing the committee expressed disappointment over a mistake that led to more than 14 000 eligible students wrongfully losing their funding. They demanded information on steps being taken to rectify the situation and prevent future incidents.

Chairperson of the committee Nompendulo Mkhatshwa (ANC) stressed:

This entity, with the mandate it has, should be the best run entity in the country but right now it is not. It’s an embarrassment.

Mkhatshwa emphasized the widespread unhappiness among students, citing anxiety as a major concern.

Wrongfully defunding students

Earlier this year, the scheme began defunding students who they deemed were not deserving of funding.

The bursary scheme 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. 

The Special Investigating Unit (SIU) presented draft findings to the Standing Committee on Public Accounts (SCOPA) that revealed that a staggering 76 institutions, involving approximately 40 044 students, were improperly granted bursaries between 2018 and 2021. 

The prescriptions of our policies and the law will be implemented firmly and vigorously to avoid a repeat of the more than R5 billion that was allocated incorrectly to students since 2016.

However, it was later revealed that some students had been mistakenly defunded due to NSFAS errors.

NSFAS acting CEO Masile Ramorwesi explained that 45,927 students were disqualified for submitting falsified or fraudulent documents.

The main reason for disqualification was that most first-time entering students had a household income of more than R350,000, while returning students either did not meet the required academic progression – which is 50% of all registered modules – or exceeded the minimum number of years allocated to achieve the qualification.

He confirmed that after NSFAS re-evaluated the applications, 14,703 applications were reinstated, while 31,224 remained disqualified.

Ramorwesi said they were correcting this, and all the wrongfully defunded students would now be funded.

NSFAS communication issues

Furthermore, the MP’s stressed the need for open communication to reach a consensus and provide assurance to the student community. There was frustration with NSFAS for not responding to queries adequately, and when they did, the responses were perceived as evasive and unprofessional.

In addition, there was also call for the scheme to establish a communications unit to enhance its ability to communicate effectively. It was noted that students often felt uninformed, and their questions went unanswered.

Members expressed surprise that even their own inquiries were ignored by NSFAS.

NSFAS lacks the decency even to respond to Members’ queries. Stakeholders do not trust NSFAS. NSFAS needed to centralise its communication. The hearsay information was exhausting. The Committee must be able to trust NSFAS, and there was a trust deficit between the Committee and NSFAS.

They further emphasized the urgent need for resolution, as these issues were negatively impacting students. The NSFAS Board and management were warned of potential consequences if the situation persisted.

NSFAS was given a two-week deadline to present a plan for how it will resolve the issues raised by the committee.

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NSFAS issues

Earlier this month, the National Student Financial Aid Scheme (NSFAS) was grilled in Parliament by the Portfolio Committee for Higher Education over several challenges and issues the scheme has been battling with.


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