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Students divided on NSFAS payment plan

NSFAS board chairperson Ernest Khosa expressed the entity’s view of still forging ahead with the direct payment system. Picture: Thobile Mathonsi/African News Agency (ANA)

NSFAS board chairperson Ernest Khosa expressed the entity’s view of still forging ahead with the direct payment system. Picture: Thobile Mathonsi/African News Agency (ANA)

Published Oct 20, 2023


While the National Student Financial Aid Scheme (NSFAS) board has moved to end the contracts of fin-tech service providers to distribute student allowances, there has been mixed reaction on the continuation of the direct payment system.

This as NSFAS board chairperson Ernest Khosa expressed the entity’s view of still forging ahead with the direct payment system.

According to Khosa the board was satisfied with policy changes, including the introduction of the direct payment method, saying the system was not the problem but how it was implemented was important.

“The board views the direct payment solution as a necessary measure to reduce instances of unauthorised access to beneficiaries’ allowances, payment of ghost students (and) inconsistencies and delayed payments of allowances.

"The direct payment solution is in line with the student-centred model which NSFAS adopted.“

He was speaking at a media briefing on Wednesday where he shared the preliminary findings of the Werkmans Attorneys report into tender irregularity allegations at NSFAS.

NSFAS introduced direct payment, partnering with service providers eZaga Holdings, Coinvest Africa, Tenet Technology and Noracco Corporation, with intentions to ensure accountability on student allowances and to establish a better co-ordinated system of the transfer of funds to students.

This was meant to be a 5-year contract to directly pay student allowances through a compulsory bank account.

However, it has been met with challenges including a delay in payments, concern over excessive fee charges, inaccessibility of service providers and lack of clarity on how to access funds.

The portfolio committee on higher education had highlighted the lack of accountability as NSFAS contended that they had correctly disbursed funds, while service providers pointed fingers at the entity for delaying fund transfers.

This after it came to light during the fin-tech company presentations that nearly 100 000 students or more had not received allowances.

UCT Student Representative Council (SRC) president Hlengiwe Dube said their stance had never changed, as they still rejected the direct payment system even if new service providers were appointed.

“Since day one we have never supported this third party system.

It should not have been allowed or even rolled out in such a space, they had not even completed dealing with challenges at TVET colleges where they piloted but still moved the project to a bigger crowd in universities.

“Just as we anticipated, it did not work out. We are dealing with a high bank charge, something that didn’t exist. To date some students have not received their allowances, university and SRC’s had to intervene after depleting our resources,” said Dube.

UWC SRC president Mandla-Onke Notyawa expressed the same sentiments that direct payment must be discontinued.

“NSFAS must end the direct payment system and for institutions to continue their payment system to students.”

South African Union of Students (Saus) national spokesperson Asive Dlanjwa said they welcomed the decision for the contracts to be terminated.

“We are not surprised by the board’s decision. In fact, we welcome the report outcomes. We were always of the view that the service providers were not competent and this was evident in the disbursement of student allowances.

“As a result, there were protests at about five institutions over delayed allowances and other issues. Thousands of students have been disadvantaged. We heard the board chairperson saying that they would ensure that students are not affected by the cancellation of the contracts. We cannot take their word but only wait and see how things will play out,” said Dlanjwa.

He said while they were against the appointment of the four service providers they were still in support of the new direct payment system.

“We still support the direct method because it can curb corruption which was seen at NSFAS and at tertiary institutions where there are also ghost students.

“This system, if operated well, will mean students can get their funds without delays.

“It is more efficient and timely,” he said.

Organisation Undoing Tax Abuse’s (Outa) investigation manager Rudie Heyneke said they were confident that the investigation team made sound recommendations to the board and welcomed the outcomes shared.

She said they advocated for an allowance payment system that was in the best interest of the students.

The Werksmans probe was initiated after Outa conducted an investigation.

Outa now calls for the report to be made public soon.

“The publication of the report will not only be in accordance with the external values of NSFAS to be transparent towards students and stakeholders, but will also be in line with the NSFAS board’s commitment to clean governance as stated by the chairperson on August 16.

“Outa welcomes the board’s resolution to implement the recommendations without interference from the shareholder or any other external stakeholder," said Heyneke.

Cape Times