The National Student Financial Aid Scheme (NSFAS) assisted financially vulnerable students in obtaining tertiary education qualifications through the provision of comprehensive bursaries. However, the scheme’s effectiveness has been questioned in recent months as several issues around the disbursement of funding have been raised.
NSFAS is currently funding more than one million students enrolled in approved courses at public universities and Technical and Vocational Education and Training (TVET) colleges in South Africa. This funding covers tuition fees, and registration fees and provides students with allowances for food, accommodation and learning materials.
In 2022, NSFAS introduced a direct payment system for NSFAS allowances. This was done to give students the confidence that allowances will be paid and done so in good time. All students had to do was register for the NSFAS bank account.
NSFAS partnered with four service providers to facilitate the direct payment of student allowances. The system was first introduced at TVET colleges and in 2024 students at universities began using the direct payment system.
However, several challenges have arisen since the system has been introduced. This includes students experiencing difficulties registering for the NSFAS bank account, exorbitant bank charges and in some cases, non-payment of allowances.
Steps To Rectify NSFAS Allowances Challenges
The Department of Higher and Training (DHET) met with the NSFAS board and requested that they provide a turn-around strategy to Minister Blade Nzimande. NSFAS also submitted an audit plan to the Minister, and the Department will now keep a close eye on its progress, checking in on it monthly.
Plans are also underway to evaluate the accommodation cap for NSFAS students. NSFAS introduced an accommodation cap of R45,000 which has negatively impacted students living in areas where rent is more expensive.
The Department has been engaging with the World Bank’s International Finance Corporation (IFC) and NSFAS to ensure further research on the price cap of student accommodation is concluded and used to inform policy decisions.
Fintech Companies
Questions have also been raised about the Fintech companies approved to pay NSFAS allowances to students. Members of parliament voiced their concern about the inability of the Fintech companies to distribute allowances to students and allegations of some of them having not met the minimum requirements to be appointed.
The DHET says the allegations made against the Fintech companies are very serious. They add that they have engaged with the NSFAS board on several occasions and are awaiting an attorney’s findings so that any decision taken is guided by verifiable facts and evidence.
The Department regrets that some students have been affected by the systems introduced by the Fintech companies. The Department has been advised that NSFAS has sent a team of senior officials to ten of the most affected institutions to engage the students and understand the challenges they are experiencing with the Fintech companies.
The outcome of their findings is set to be communicated in due time.
