The DA has raised concerns about the National Student Aid Scheme’s (NSFAS) direct payment system.
DA MP Chantel King has has written to the Minister of Higher Education, Dr Blade Nzimande, and the Banking Association of South Africa seeking clarity on the matter.
Under the new system, NSFAS beneficiaries are required to use one of four service providers, namely Coinvest Africa, Tenet Technology, Ezaga Holdings, or Norraco Corporation to access their funds through the newly introduced NSFAS Mastercard.
The DA is questioning the reasons behind choosing these service providers over established banks and has raised concerns about the application requirements for financial institutions to offer direct payment services.
King highlighted the importance of transparency when it comes to the service and transaction costs associated with financial organisations. She urged Nzimande to take responsibility for the results revealed in the Organisation Undoing Tax Abuse investigative report.
The MP expressed unease about insufficient information shared with students and universities concerning the direct payment system and its financial implications, criticizing the deduction of service fees before NSFAS beneficiaries receive their allowances and saying it is unfair.
“Students and universities were kept in the dark about the direct payment system and its cost implications,” King said.
“On top of that, NSFAS beneficiaries are also still waiting on their allowances while service fees have already been deducted. And a lot of students are still waiting on funding and appeal outcomes.”
Highlighting the significance of NSFAS funding, King stressed the need for caution in the implementation of the direct payment system.
“NSFAS funding is a way for students from ‘poor and working-class families’ to have financial means to access higher education.
“Given the various NSFAS corruption investigations, the failure of an administrator to resolve its challenges, and the fact that SIU [Special Investigative Unit] investigation findings are still under wraps, surely the minister should tread with caution when it comes to NSFAS.
“Poor and vulnerable students must not be used as cash cows to enrich companies.”
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