In 2022, the National Student Financial Aid Scheme (NSFAS) announced that allowance payments would be paid directly to funded students. While this new payment solution sought to give NSFAS greater control over NSFAS allowance payments and give students confidence allowances would be paid, the system’s implementation has been fraught with challenges.
If a student submits a successful NSFAS application, they will receive a comprehensive bursary which covers their tuition and registration fees. Students are also provided with several allowances to purchase food, learning materials and pay for accommodation whilst they pursue their studies.
In 2022, NSFAS revealed its plan to pay these allowances directly to students. The payment system was first introduced at Technical Vocational Education and Training (TVET) colleges and was expanded to include universities in 2023.
The implementation of the direct payment system has been fraught with challenges according to university students. The serious nature of these challenges recently led student leaders in the Western Cape to march on parliament and deliver a memorandum of demands to the Department of Higher Education, Science and Innovation.
Direct Allowance Payment Challenges
Careers Portal spoke to William Sezoe who serves as the Student Representative Council (SRC) Vice-Chair at Stellenbosch University to get a sense of the challenges facing students with regard to the direct payment system.
More than 5000 students at Stellenbosch University, who had been provisionally approved for funding from NSFAS, indicating they meet the eligibility criteria to be funded, were required to onboard themselves onto the Coinvest system which would allow them to begin receiving their allowances directly from NSFAS.
Sezoe says, according to Coinvest, just over 2 600 students were eligible to onboard themselves onto the system
It's important to note that students were required to register for their NSFAS bank account and failure to do this, would lead to delays in allowance payment. Some 2 000 students who were unable to register for their NSFAS bank account would therefore not be able to access their allowances.
Why, if the university has 5 100 students approved for funding, why can only 2 600 students register?
When students enquired how many students have registered for the payment system during a meeting with NSFAS and Coinvest in June 2023, the service provider indicated that only 50 students, of the 2 600 students, had registered.
Sezoe says this is when students found out that only 2 600 students were eligible to onboard themselves, and they realised that more than 2 000 students, who were approved for funding, were unable to register.
NSFAS indicated they had registration data for 2 600 students. This suggested that the university did not submit registration data for approximately 2000 students.
Sezoe says Stellenbosch University disputed this and said they had sent registration for all provisionally-funded students. While the financial aid scheme and the university disputed how much registration data was sent and received, students were left without any money for food and accommodation.
At this stage, we are still not sure how they are going to clear up that matter.
It's important to note that the financial aid scheme will not approve the payment of allowances for students whose registration data have not been received. These students are classified as provisionally-funded and will only receive funding and allowances when their registration data is received by NSFAS.
Service Providers On Campus
To ensure students can onboard themselves, NSFAS instructed service providers to be stationed on campus to assist students. However, these service provider representatives can only assist students onboard themselves.
The only purpose they serve is to help you onboard, that's only if you can onboard.
They cannot assist students whose NSFAS status is provisionally funded. This is challenging as in the eyes of the students, the service provider is responsible for paying the allowances to students, however, they can assist students with questions if they are funded or not.
Sezoe shares a story about a student who is living far away from their home. This student is provisionally funded and approached the Coinvest representative out of desperation wanting to know if they will receive their allowances or if they should pack their bags and go home.
This demonstrates the situation students find themselves in whilst awaiting registration data to be processed by NSFAS.
Incorrect NSFAS Allowance Payments
Sezoe says some students also received the incorrect accommodation allowance leaving them with less money to purchase food throughout the month. Students who live in catered residences receive a lower NSFAS allowance amount (approximately R305) than students staying in self-catered accommodation (R1 650).
This could be the result of an error made in the interpretation of data received by NSFAS as the data indicates which type of accommodation a student is staying in and by extension how much money they should receive in their NSFAS bank account.
NSFAS disputes that claims that incorrect allowance amounts were paid to students are misleading and untrue.
Exorbitant Bank Charges
NSFAS said that students will only be charged R12 per month for using their NSFAS bank account. However, this has not been the case. In addition to the R12 bank fee, students have complained about exorbitant charges they have incurred as they transact with their money.
The Organisation Undoing Tax Abuse (OUTA) did a price comparison which revealed students are being charged for transacting with their NSFAS bank account at significantly higher charges compared to other banks.
NSFAS Spokesperson, Slumezi Skosana, said it is standard practice to impose fees for continuing to use their NSFAS bank account. They added that it would be misleading for students to use an institution like a bank and not pay fees.
Higher Education Minister, Blade Nzimande said they were brief regarding the R12 bank fee, but conceded that bank charges are inevitable.
NSFAS Response To Claims
In a media briefing, NSFAS board chairperson, Ernest Khosa says mistakes made by institutions with the submission of registration data causes problems.
One of the biggest contributions, which is not only specific to direct payments, has been institutions’ non-compliance in submitting registration data. Registration data is either submitted late or incorrectly and this disarms NSFAS as we can’t pay students whose registration has not been confirmed.
NSFAS policy requires institutions to send updated registration monthly. Khosa says that any wrong payments, such as those paid to students who have dropped out or not attending classes, would be a result of institutions not alerting NSFAS through this process
Student leaders marched to parliament to reject the implementation of the NSFAS direct payment system. They also raised their concerns on other issues including the NSFAS accommodation cap, bank charges for the NSFAS bank account, the 60 credit policy and delayed NSFAS appeal decisions.
You will see all the latest NSFAS news and updates here on Careers Portal.