The National Student Financial Aid Scheme (NSFAS) is saving R21 per transaction by paying allowances directly into the accounts of technical and vocational education and training colleges (TVET) students.
This was revealed by the scheme’s administrator Freeman Nomvalo. He was giving an update on governance, management and administration at the public bursary scheme on Tuesday.
Direct payment saves R21 per transaction
Nomvalo said it costs NSFAS less than R1 to pay students directly from the scheme’s bank account into the students’ account. When NSFAS was using direct payment providers, it cost NSFAS R12 and students R10 per transfer, which totaled R22.
NSFAS funds more than a 1 million students each year, less than 35% of whom are TVET college students.
The scheme started paying allowances directly into TVET college students’ accounts in May. This after the cancellation of contracts of four direct payment providers.
NSFAS terminated the contracts of eZaga, Noracco, Coinvest, and Tenet Tech. This was after an independent investigation found irregularities in the awarding of the contracts.
The investigations were carried out by law firm Werksmans Attorneys and Advocate Tembeka Ngcukaitobi SC.
EZaga has challenged the cancellation of its contract in the Western Cape High Court. It was successful in interdicting NSFAS from terminating it. NSFAS has appealed the decision to reinstate eZaga as a direct payment provider.
The briefing also marked more than 100 days of Nomvalo as administrator. He said universities will continue to disburse allowances to students as an interim measure.
NSFAS mandate
“The introduction of intermediaries in the disbursement of student allowances and payment of student accommodation have compromised and veered NSFAS away from its mandate.
“NSFAS loses millions of rands monthly on intermediary activities. These… could have been sourced cheaper and built internally overtime,” he said.
Nomvalo said the scheme is also clamping down on irregularities. It is also succeeding at establishing a system for good governance, management and administration.
He said 11,000 or about 6% of students did not submit banking details. However, none have come forward to complain about non-payment of allowances.
Some students left out
“There are possible two scenarios. One, that these students have no means to reach us, possibly the messages did not reach them. Or regrettably, some of these could be non-existent students.
“What is more worrying is that, to date, we have not received complaints from students who may have not received their allowances,” he said.
He said the plan is to migrate the payment of university student allowances to a more cost effective and efficient payment system.
“The planning for the migration of universities was halted by the interdict awarded in favour of eZaga and others. It was awarded by the Western Cape High Court on July 12 2024, and NSFAS is appealing it,” he said.
He added that NSFAS has also implemented a contract register in its supply chain management unit. This is to manage contracts.
“This is triggered by some of our findings [about some service providers]. Some service providers were paid by NSFAS without any evidence of work performed,” he said.
Regarding private accommodation providers’ concerns, Nomvalo said NSFAS has processed bulk catch-up payments. These are payments of of all legitimate claims in the past two months.
“As at the July 31, our disbursement for private student accommodation have reached R1-billion. However, I am aware that there remain some landlords that are aggrieved. The important issue now is to ensure all payments are done on time. This is the main remaining pain point for accommodation providers,” he said.
Student accommodation road shows
He said NSFAS will be hosting student accommodation roadshows across the country. Starting in KwaZulu-Natal on Wednesday.
“Among others, these roadshows are intended to engage directly with affected landlords. Those that are not able to travel to Cape Town and continue to be affected by payments.
“I have also extended invitations to our colleagues at universities and TVET sector. To ensure we all work together in resolving these challenges. As experienced by our beneficiaries and the landlords,” he said.
