Minister Nzimande Sets Deadline for NSFAS Report on Direct Payment Issues

Minister Nzimande Sets Deadline for NSFAS Report on Direct Payment Issues.Cape Town – Blade Nzimande, the Minister of Higher Education, Science and Technology, has instructed the National Student Financial Aid Scheme (NSFAS) Board to present a plan by August 30 to tackle the obstacles associated with the newly introduced direct payment solution.

NSFAS Board Investigates CEO Amidst Direct Payment Concerns

The NSFAS Board revealed its intention to investigate the CEO, Andile Nongogo, regarding alleged misconduct related to collaborations with the Services Sector Education and Training Authority (Services Seta) and the awarding of contracts at NSFAS. The investigation will focus particularly on the direct payment project.

During the investigation, Nongogo will be on leave, with Masile Ramorwesi, the chief financial officer, serving as the acting CEO until further notice.

Student Protests Erupt Over Direct Payment System

Protests have erupted across universities including Stellenbosch University, the Cape Peninsula University of Technology, the University of the Western Cape (UWC), and the University of Cape Town due to what students have called the “disastrous” implementation of the direct payment system through third-party companies: Coinvest Africa, eZaga Holdings, Noracco Corporation, and Tenet Technology.

Mismanagement and Tender Corruption Under Scrutiny

Last year, the Organization Undoing Tax Abuse (Outa) initiated an investigation into the mishandling of student funds and potential corruption in tenders at NSFAS.

NSFAS engaged businesses lacking banking licenses or VAT registrations to oversee direct payments of student allowances. These non-financial service providers were awarded tenders. It was also discovered that these providers charged students significantly higher fees than major banks.

Controversy Continues Despite Concerns Raised

Despite concerns raised by Outa to both NSFAS and the Special Investigating Unit (SIU), NSFAS proceeded with the implementation of the system, involving the four new service providers, by the end of June this year.

Minister Emphasizes the Need for Direct Payment Solution

Minister Nzimande’s statement emphasized that the direct payment solution is essential for curtailing unauthorized access to beneficiaries’ allowances, addressing issues like ghost students, inconsistencies, and delayed allowance payments. He further urged the NSFAS board to release details and information about those involved in defrauding the scheme to ensure transparency.

Calls for Suspension of NSFAS Contracts

The Democratic Alliance (DA) has called for the suspension of NSFAS contracts pending investigations by the SIU and the Public Protector. The DA’s higher education spokesperson, Chantel King, highlighted that established banks had applied for the tender three times and that awarding the contract to them would have been a logical choice.

Student Outcry Over Delayed Allowances

Students, including Asanda Mchunu, the Communications Officer at the Economic Freedom Fighters Student Command (EFFSC) at UWC, have expressed frustration over the delayed allowance payments. Mchunu pointed out that many students had been provisionally funded but were not receiving their allowances. Additionally, concerns were raised about the lack of experience of the newly appointed service providers, affecting students’ well-being and academic performance.