The new direct payment system for allowances introduced by the National Student Financial Aid Scheme (NSFAS) was designed to streamline allowance payments directly to funded students, has triggered outrage due to additional fees imposed by service providers.
Students from Walter Sisulu University in Mthatha, Eastern Cape, and Nelson Mandela University in Gqeberha have taken to the streets, demanding a reversal of the new system. A march to parliament is also being held today, initiated by the Stellenbosch University SRC.
Exorbitant Charges Spark Student Unrest
At the forefront of the protests are the concerns over the excessive charges that students now face with the new payment system. Disgruntled students at Walter Sisulu University (WSU) have highlighted the issues with one of the bursary scheme's service providers, Tenet Technologies.
Students complain that the new service providers impose a bundle fee of R20 upon the arrival of their monthly allowance, leaving them puzzled about the destination of this deduction.
Speaking about the additional financial burden, a student shared:
There are charges that are very ridiculous to say the least. They have a bundle fee that is 20 rands. A bundle fee means that when money enters your account, that twenty rands is automatically deducted. We don't know where it goes.
The situation worsens with an extra transaction fee of R30 when students make withdrawals through ATMs or retail outlets using the cash send option. As dissatisfaction grows, the students are determined to persist with their protests until their grievances are addressed.
Universities Seek Resolution Amid Ongoing Portests
The turmoil has extended to Nelson Mandela University (NMMU) in Gqeberha, where students are raising similar concerns about the service provider Norraco, appointed by NSFAS to handle allowance payments.
NMMU's management has taken a proactive stance, expressing their intention to engage with NSFAS to resolve the escalating issue. On the other hand, WSU's management emphasises that the responsibility for the introduced payment system lies with NSFAS.
"It is a decision by NSFAS to introduce a new payment system for those students that it funds. Secondly, amongst other demands that they've put forward is that they want the university Clinic to be open 24 hours a day in addition to the condition of their external residences," stated a WSU management representative.
Origins of the Controversial Payment System
The new NSFAS payment system was rolled out in 2022 with the aim of ensuring direct allowance payments to funded students through the scheme. This system was developed in partnership with four service providers: Tenet Technology, Coinvest Africa, Ezaga Holdings, and Norraco Corporation.
It's implementation was intended to simplify the process for students to access their funds through their NSFAS bank accounts.
In response to previous grievances, NSFAS had defended its new payment system by assuring students that the service providers would enhance their presence within institutions to address any queries related to accessing their allowance payments. However, these assurances appear to have done little to quell the mounting discontent.
NSFAS CEO's Future in Question
As the controversy surrounding the new payment system intensifies, there are reports that NSFAS CEO, Andile Nongogo, may be placed on special leave. This follows revelations that the four financial technology companies are not registered as financial service providers.
This has prompted an investigation by the public protector after the Stellenbosch University's student representative council filed a complaint against NSFAS over the matter.
Students Rally Further Protest Action Over Transaction
When students learned that Tenet Technology, eZaga, Norraco Corporation, and Coinvest Africa will make at least R4.3 million off of them each month in increased bank charges and other service fees, they were understandably furious.
As a result, students from the Stellenbosch University as well as the University of the Western Cape embarked on march to parliament on Wednsday to demand that the new payment be scrapped by the Department of Higher Education.
The unrest and widespread dissatisfaction among students have raised questions about the leadership's handling of the situation and the overall direction of the bursary scheme.
