Technical and Vocational Education and Training (TVET) colleges were the first institutions to use the National Student Financial Aid Scheme (NSFAS) direct allowance payment system. Several challenges have been experienced by students.
The rollout of the direct payment system in TVET colleges began in late 2022, with the first direct payments made in November 2022. The 2023 academic year marked the continuation and improvement of this process.
The transition to direct payments for students at the 44 colleges was gradual, as these students were already receiving their allowances directly via the NSFAS Wallet. The remaining six Western Cape colleges began receiving funds from NSFAS and disbursing them to students themselves.
Nzimande revealed that TVET colleges have made remarkable progress, with all 50 colleges successfully onboarded to the direct payment method of disbursing allowances.
They explain that by the end of July 2023, a total of 187,180 students in the TVET sector achieved KYC compliance, indicating full registration to access their allowances through the direct payment system.
Challenges Encountered at TVET Colleges
Implementing direct payments in TVET colleges also had several challenges. These include bank card shortages, slow distribution of cards, partner challenges, delays in query handling, inaccurate data, bank charges, and underage students.
The initial implementation via virtual cards led to shortages, delays, and long queues when physical bank card distribution began around March 2023. While efforts have been made to provide bank cards to students, the multiple registration cycles in the TVET sector continue to pose logistical challenges.
NSFAS relies on manual partner reports, causing delays and inefficiencies. An integrated reporting module is being developed to automate the sharing of reports, improving overall operational efficiency.
Students and institutions faced difficulties in getting through to partner call centres, with emailed queries often going unanswered. Partners have been provided feedback directly through bi-weekly meetings to enhance their capacity.
It was also revealed that some partners have committed to meetings but failed to attend, causing dissatisfaction among stakeholders Nzimande acknowledged that addressing partner attendance and fostering cooperation is essential to prevent disruptions and maintain positive relationships.
There were also errors in registration templates that led to processing delays and blocked allowances. To address this, system enhancements are being developed to implement technology-driven mechanisms to identify and rectify incorrect allowance claims.
A delay was also experienced in developing a FICA-compliant process for onboarding underage students.
Students also voiced concerns about the direct payment charges being excessive and are calling for a fee structure review.
NSFAS Will Terminate Contracts With Allowance Payment Service Providers
The National Student Financial Aid Scheme (NSFAS) is set to terminate contracts with service providers for the direct payment of student allowances. This comes after the board carefully reviews the findings of an investigation into potential conflicts of interest in the appointment of service providers.
Four service providers were appointed to facilitate direct payments to students as part of this bid.
Several key findings were made by Werksmans Attorneys. They found that there may have been possible relationships between key individuals including CEO Nongogo and the Fintech companies appointed to pay allowances directly to students.
