Parliament Concerns Over NSFAS Direct Payment System

Parliament Concerns Over NSFAS Direct Payment System.The National Student Financial Aid Scheme (NSFAS) has been providing essential bursaries to over a million students in public universities and colleges. However, doubts have emerged regarding the efficacy of their payment system.

Parliamentary Critique of NSFAS

The Parliamentary Committee for Higher Education, Science, and Innovation has strongly criticized NSFAS for its failure to adequately support students, particularly in terms of allowance payments.

Financial Hardship Due to NSFAS Allowance Failures

NSFAS allowance payment failures have led to financial distress among students, causing frustration and the inability to cover their essential expenses.

Overview of NSFAS Bursaries

NSFAS offers bursaries to students from disadvantaged backgrounds, covering tuition fees, registration fees, and various allowances to support their tertiary education.

Introduction of NSFAS Direct Payment System

In 2022, NSFAS introduced a direct payment system for allowances, aiming to reduce payment delays and enhance services for NSFAS-funded students.

Challenges with the Direct Payment System

The implementation of the direct payment system at universities has encountered several challenges, including late payments, excessive bank charges, and usability issues.

Service Providers for Direct Payments

NSFAS collaborated with four service providers, namely eZaga, Coinvest, Norocco, and Tenet Technologies, to facilitate the direct payment system.

Parliament Questions on Service Provider Selection

Members of parliament raised questions about the legitimacy of the selection process for the service providers and criticized NSFAS for altering its tender requirements.

NSFAS Response to Selection Process Concerns

NSFAS defended its selection process, stating that concerns about legitimacy arose only when bids from major banks were rejected.

OUTA Comparison of Bank Fees

The Organisation Undoing Tax Abuse (OUTA) compared bank fees charged by commercial banks with those imposed by NSFAS-appointed service providers, revealing that students were paying higher fees.

Minister Defense of NSFAS

Higher education minister Blade Nzimande defended NSFAS, acknowledging that bank charges were unavoidable but stating that the scheme had negotiated lower account fees for students.

NSFAS Efforts to Address Payment Issues

Despite concerns, the Parliamentary Committee supported NSFAS’s new direct payment system and highlighted issues such as incorrect payments, delayed allowances, and poor communication to students.

NSFAS Response to Payment Complaints

NSFAS announced the deployment of two teams to resolve allowance payment issues at various institutions, beginning with Rhodes University and Wits University.

NSFAS Board Utilization of Team Findings

The NSFAS board plans to use the teams’ findings to formulate an appropriate response to the allowance payment challenges.

Allegations Against NSFAS CEO

Serious allegations of corruption have been levied against NSFAS CEO Andile Nongogo, with ties to his previous work at Services SETA (SSETA), raising concerns about bid awards at NSFAS.

NSFAS Board Response to CEO Allegations

While the NSFAS board did not find Nongogo guilty of wrongdoing, they have asked him to take a leave of absence pending investigations conducted by an investigation firm and lawyers, with preliminary and final reports expected soon.