NSFAS payment delays due to sabotage by universities – eZaga

Sabotage, misinformation; lack of access to technology and tech illiteracy are barriers to the effective implementation of the National Student Financial Aid Scheme’s (NSFAS) new direct payment system.

This is according to Ismael Ally, the chief financial officer of eZaga – one of four fintech companies contracted by NSFAS to disburse student allowances since June.

The company, which is among the four fintech firms responsible for paying out student allowances of R1 750 to R3 035 each month, services Tshwane University of Technology (TUT), Vaal University of Technology, Durban University of Technology, University of Free State (UFS), University of Zululand and University of Limpopo.

It also disburses allowances at 11 technical and vocational education, training colleges and further education training colleges.

NSFAS, with an annual budget of R47.7-billion, funds about 1.1-million students at public universities and colleges. Of this amount, universities have been allocated R38.6-billion and TVET colleges R8.9-billion.

Speaking to Sunday World this week, Ally said the resistance by universities to the direct payment system also played a role in the way the system is negatively received by students.

All the universities under eZaga were sites of violent protests by students in the first half of August, with most campuses shutting down and moving classes online. The students were protesting a range of issues regarding the new system from late payments of allowances, exorbitant fees to registration glitches.

Ally said some of the students were discouraged by some universities from registering on the new system. “Some of the universities wrote to NSFAS appealing for an extension [on their contracts to pay students] for a host of reasons. NSFAS did not share the reasons with us.

“What we can confirm, because we paid students at those universities at the end of the month (July), is that NSFAS declined the extension,” he said.

“So, there were a lot of students who didn’t register because they were told that the universities are appealing the direct payment system,” he said.

He said though they have been engaging students bodies, including councils and unions, university management structures and financial officers since March on how the ecosystem worked, only about 45% of students at the six universities were registered to receive their allowances by July 31.

“We thought we would be at 90% at this time … interest only spiked before July 31 when the students who had registered shared how easy it was to register and receive their funds.”

He said the spike posed administrative challenges to their processes. “We needed to meticulously look at the registrations coming through to make sure everything is above board. It took a week and half to get to the 90% mark. “How our system works (is that) on approval … your allowance is paid out immediately.”

Ally also painted a picture of an efficient system that is getting a bad rap because of different role players who are resistant to change because of their own ulterior motives. He said by this week, eZaga had already registered 97.8% of students, meaning all those who registered would be paid next week. “Even with such high numbers we still have agents at campuses to help students with their queries.”

Ally said the high charges paid by some students were because by the time most students registered, they were still away for the holidays and could not be issued with bank cards.

“It forced students to utilise more expensive transaction types. Like any bank account, if I’m paying you from a different account and do a pay and clear, that transaction carries a cost.”

He said the card allocation numbers are now above 75%.

He said students who still had to register were facing individual challenges.

“For example there is a student who cannot get an identity document (ID) because their ID number is conflicting with a different person who is potentially in the country as an illegal immigrant,” he said.

University of Free State student representatives council president Okuhle April said the reality on the ground is different from the rosy picture painted by Ally. “There’s no a single eZaga agent at any of our campuses.

“It takes up to 48 hours to transfer money from the eZaga account to your own bank account. Most students prefer to transact with their banks, not the NSFAS card,” she said.

The SRC representative at TUT, the university with the biggest number of NSFAS beneficiaries, did not respond to questions.

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