UJ owes private student housing owners millions in NSFAS funds

A company contracted by the University of Johannesburg (UJ) to disburse funds to privately-owned accommodation providers has not paid more than 30 accommodation providers millions of rands.

All Encompassing Switch (AE Switch), which UJ used to disburse allowances to students funded by the National Student Financial Aid Scheme (NSFAS) last year, has not paid funds, ranging from R20 000 to R4.5-million a month, to accommodation providers, some as far back as July.

This was revealed by accommodation providers who spoke to Sunday World on condition of anonymity.

The accommodation providers said they have not been able to pay staff, service providers, or bonds. They said some are on the cusp of closing down their businesses because they are unable to meet their financial obligations. One service provider said UJ, with whom they have signed a contract, has been making empty promises when it comes to resolving the issue.

“We had a bleak Christmas after UJ assured us that its finance office would not close for the festive season until all accommodation providers had been paid. But this was not the case,” said the service provider.

Accommodation providers whose students are predominantly funded by NSFAS are also expected to ensure their buildings comply with the requirements to meet accreditation standards for the 2024 academic year.

“How are we expected to have funds to pay fees for accreditation for 2024 when we have not been paid?” asked another service provider.

“We had students staying with us last year, using electricity, water, WiFi and transportation but the university has not paid us. How are we expected to keep our businesses running?” asked another service provider.

The service providers said UJ was alerted to the many complaints against AE Switch when it was announced that it had been contracted as a payment provider last year.

“We raised our concerns with the university about the complaints against AE Switch, some of which said the company disappeared with clients’ money. How can UJ then appoint a company with such a track record?” asked another service provider.

UJ spokesperson Herman Esterhuizen said the uni-versity was aware of an outstanding amount owed to certain privately-owned student accommodation providers (Posas) by AE Switch.

“Currently, UJ is engaging with the affected service providers to ascertain the precise outstanding amounts owed by AE Switch.

“The contract with AE Switch was scheduled to conclude by the effluxion of time on December 31, 2023,” he said.

 “After careful consideration by the university’s management executive committee and  MEC, a resolution was reached to reimburse impacted Posas, and the reimbursement process is now in progress,” said Esterhuizen.

“UJ is committed to holding AE Switch accountable and is prepared to exercise all available legal remedies.

“It’s important to note that the university adheres to well-researched and defined procedures, ensuring due diligence is conducted before vetting and appointing any service provider,” said Esterhuizen.

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