Minister Nzimande Addresses Concerns and Challenges with NSFAS Allowance Payments

Minister Nzimande Addresses Concerns and Challenges with NSFAS Allowance Payments. More than a million students depend on NSFAS allowances for essential expenses such as food, study materials, and rent. However, the introduction of a new direct payment system for allowances has posed challenges for some students.

Minister Assurance

Minister Blade Nzimande, responsible for Higher Education, asserts that there is no crisis unfolding within the National Student Financial Aid Scheme (NSFAS). Nonetheless, there are growing concerns surrounding the newly implemented direct allowance payment system.

Introduction of the Direct Payment System

In 2022, NSFAS introduced a direct payment system for allowances with the aim of reducing payment delays and ensuring timely disbursement of funds to NSFAS-funded students. The scheme also promised additional value-added services through this system.

Rollout at TVET Colleges and Universities

Initially, the NSFAS Bank Account system was launched at Technical and Vocational Education and Training (TVET) colleges, followed by its implementation at universities in 2023.

Challenges Faced by Students

Despite its intentions, the system’s implementation at universities has encountered various challenges, including delayed allowances, high bank charges, and difficulties with the student onboarding process.

Parliament Critique

Members of parliament criticized NSFAS for its inadequate support to students who experienced late allowance payments in September 2023.

Ongoing Onboarding at TVET Colleges

Minister Nzimande emphasizes that the onboarding process for the NSFAS bank account at TVET colleges is ongoing due to multiple academic terms. Students can apply for NSFAS funding at the start of semesters and trimesters throughout the year.

Onboarding Progress

The minister reports that the majority of NSFAS-funded students have registered and onboarded with the relevant service provider for the NSFAS bank account. Only four out of the country’s twenty-six universities have onboarding rates below 90%.

Concerning Onboarding Rates

However, there is concern over the onboarding rates at the University of South Africa (Unisa) and the University of Fort Hare (UFH), where only 67% and 56% of NSFAS-funded students have registered for the NSFAS bank account, respectively.

Improving Onboarding Processes

Nzimande announces that NSFAS will deploy institutional support teams to enhance onboarding processes at institutions and increase the number of registered students, ensuring timely allowance disbursement.

Student Responsibility

The minister calls on students to take the initiative to onboard themselves onto the NSFAS bank account with the designated service provider to receive their allowances.

Service Providers

NSFAS has partnered with four service providers, namely eZaga, Coinvest, Norocco, and Tenet Technologies, to facilitate the NSFAS bank account direct payment system. Students must register with the service provider assigned to their institution.

Urgent Action Required

Nzimande urges all beneficiaries who have not yet onboarded or converted to the new payment system to do so promptly, enabling NSFAS to disburse allowances without further delays.

Investigations and Bank Charges

The minister announces that NSFAS is conducting investigations into the appointment of direct payment service providers amid allegations and criticism surrounding the process and tender requirements. Additionally, Nzimande directs NSFAS to reevaluate the bank charges imposed on students and explore measures to further reduce these costs.

High Bank Fees

An analysis by the Organisation Undoing Tax Abuse (OUTA) reveals that students are paying higher fees to NSFAS-appointed service providers compared to commercial banks. Minister Nzimande awaits the final report on these investigations.

Minister Nzimande remains committed to addressing the challenges facing NSFAS and ensuring that students receive their allowances in a timely and cost-effective manner.