The National Student Financial Aid Scheme (NSFAS) has admitted that incorrect allowances were paid to University of Johannesburg (UJ) students. The financial aid scheme will need the help of affected students to ensure correct allowances are paid going forward.
NSFAS provides comprehensive bursaries and student loans to deserving students enrolled in approved courses at public universities and Technical and Vocational Education and Training (TVET) Colleges.
This funding also includes the provision of several allowances for students based on their living arrangements while they study. The value of each NSFAS allowance will change based on their living arrangements
NSFAS may provide students with accommodation allowances, meal allowances and learning material allowances. Students who stay in catered accommodation will not receive a meal allowance, while students living at home receive a transport allowance instead of an accommodation allowance.
Institutions are required to provide NSFAS with registration data of students indicating their living arrangements, and by extension, which allowances they will receive.
NSFAS says UJ provided incorrect registration data resulting in erroneous allowances being paid to students.
During the 2024 academic year registration data upload period, the University of Johannesburg (UJ) mistakenly uploaded incorrect registration data, resulting in erroneous allowances being paid out to students. Instead of uploading the correct amount of R16500.00 for the academic year 2024, the institution accidentally uploaded the R3300.00 meal allowance.
NSFAS explained that their system further determined that the allowance paid to students (R3,300) was an annual amount and subsequently this was then divided by 10, representing the ten months students would receive NSFAS allowances.
The NSFAS system processed the R3300 claimed assuming it was for annual allowances, and consequently divided it by 10, representing the 10 months from February to November 2024.
This also meant that UJ students received R330 instead of the R1650 allowance they were entitled to. NSFAS believes this will lead to anger among students and create a negative perception of the Direct Payment System.
Students who received lower allowances (R330.00 instead of R1650.00) than expected are likely to be dissatisfied. This dissatisfaction may lead to protests and a negative perception of the NSFAS direct payment process.
NSFAS confirmed that Direct Payment Service will take over allowance payments from April 2024 after institutions handle payments at the beginning of the 2024 academic year.
This is seen by students as a controversial decision. Students marched to parliament in 2023 to protest against the use of the direct payment system due to several challenges including exorbitant bank charges.
Later in the year, NSFAS CEO Andile Nongogo was terminated from his position due to a potential conflict of interest regarding the appointment of the four companies chosen to facilitate direct payments.
The Werkmans report recommended that NSFAS terminate the contracts of these service providers. While NSFAS said this remains their intention, the companies will continue to process allowances payments as the financial aid scheme anticipates legal action from the companies.
In the meantime, NSFAS asked UJ to investigate the issue that led to error allowance payments contact affected students and make necessary corrections in the data.
Additionally, NSFAS will have to ensure that the adjustment platform is ready to receive corrections.
NSFAS has expressed concern that the error made by UJ may tarnish its image by creating negative publicity around the scheme.
There is a reputational risk associated with this incident. The NSFAS disbursement process might come under scrutiny and be blamed for UJ's error.
"Negative publicity can impact NSFAS's image and erode public trust in its operations", concluded the statement.
