Inside the InSeta student fund crisis

A R376-million student bursary scheme meant to open the door to higher education for poor and disadvantaged students was hit by delayed payments, unpaid accommodation providers, unresolved student debt and emergency rescue measures, according to an internal Inseta report.

The report on the Insurance Sector Student Fund (ISSF), signed on May 21, shows that the Insurance Sector Education and Training Authority intervened directly after the scheme ran into payment and reconciliation problems affecting students, universities, colleges and
landlords.

Last week InSeta acting CEO Zanele Malaza told Sunday World that “as part of its ongoing work, payments to the majority of the ISSF beneficiaries and recipients have been processed, and the remaining cases are being finalised, with completion targeted for the end of June 2026”.

“The institution is engaging the relevant universities and providers directly to resolve all outstanding amounts. As this work is still underway, InSeta will provide a substantive update once the remaining payments are complete.”

The ISSF bursary programme, launched in December 2021 as a co-funded initiative, aims to assist students in various fields, including insurance, actuarial science, financial management, accounting, ICT, compliance, economics, business studies and law.

By May this year, the report shows, InSeta had started implementing direct interventions to support affected students, institutions and service providers.

InSeta recorded R19.2-million allocated to co-funders, R16.5-million to higher education institutions and strategic partners, and R69.9-million to public beneficiaries.

Out of a total allocation of about R105.6-million, only about R6.5-million had been disbursed at the time of the report, leaving about R99.1-million recorded as “remaining”.

The public beneficiaries category had R69.9-million allocated, while only R4.6-million had been disbursed, leaving R65.3-million outstanding.

The report says the R4.6-million was paid directly by the service provider during the week ending May 21. The payment covered three institutions and accommodation providers, including the University of Cape Town, North West University and private property accommodation providers. It also included direct allowances to 10 students.

InSeta said its team had started paying institutions and other providers directly to fast-track data allowances, meals and other support. It had also secured a database of landlords and bank confirmation letters to enable direct accommodation payments.

Three quotations had also been obtained from suppliers for laptops and data.

The report shows that InSeta’s organisational planning, data and reporting team was also roped in to conduct physical visits to institutions where required.

The affected students were spread across universities, TVET colleges and private institutions, including UCT, North West University, University of Johannesburg, University of Pretoria, University of South Africa, University of the Free State, University of KwaZulu-Natal, Sol Plaatje University, Boston City College, Eduvos, Mancosa, Richfield, Rosebank, Regent Business School, Ekurhuleni East College and Ekurhuleni West TVET College.

A payment status table in the report records 263 students linked to current payments of about R24-million. The table records 70% and 30% payment tranches, with some institutions due to receive 70% by the end of May and others by June.

InSeta said its policy did not cover historical debt for students previously supported by other funders, but it would still conduct and conclude an assessment report on historical debt for ISSF beneficiaries by June 15. It is also stated that current amounts above InSeta funding thresholds would be assessed, particularly for key programmes such as actuarial science.

The report names Mabophe Business Solutions as the appointed service provider responsible for bursary administration and coordination, student recruitment and onboarding, liaison with institutions, financial administration and student support. The original contract value was R376-million over three years. InSeta said the service provider would be paid project administration fees of 7.5%.

The report says the contract included an approved R346-million from the National Skills Fund (NSF), which was later halted “due to the changes at the NSF”. InSeta said the NSF arrangement was discontinued at the disbursement stage and that the process to revive the co-funding had started.

The report states that the provider’s performance “has not been in question” and that the current payment challenges were caused by “a combination of factors, largely internal”.

The report states that an audit clean-up process covering data from two financial programmes also affected the reconciliation and payment processes.

The same report says the fund had monthly and quarterly progress reports, academic performance tracking, financial reconciliation, audit controls, and risk and compliance monitoring.

The report states that these controls aimed to monitor funded students, confirm registrations, track academic progress, assess dropout rates, manage financial disbursements, and implement student support interventions.

By late May, InSeta was paying students, landlords and institutions directly, while assessing student debt and dealing with outstanding support linked to fees, accommodation, meals, data, laptops and allowances.

Setumo Stone