Young people’s future in jeopardy while NSFAS remains a cash cow for the opportunistic and politically connected

By Msindisi Fengu

20 May 2024

Years of mismanagement have marred the loan scheme and jeopardised students’ tertiary studies.

Every time I hear about the bungles at the National Student Financial Aid Scheme (NSFAS), my heart sinks – not because it is another state agency in crisis, but because someone in desperate need of money suffers as a result.

That someone is a version of myself: a child from a poor background, whose only hope to unlock their potential lies in the hands of public servants who very likely have experienced first-hand what it feels like to be helpless.

Surely, they personally know a helpless NSFAS beneficiary in their own families, extended families or communities? Then how does such a person play the part they do in engineering this vicious circle? It boggles my mind – the heartlessness, the inhumanity, the lack of consciousness and empathy.

Endless trouble

Yearly, without reprieve, NSFAS is in the news for all the wrong reasons. The stories follow the plight of beneficiaries at South Africa’s 26 universities and 50 technical vocational education and training colleges who are let down by crumbling systems.

If it is not delayed allowances, then there are discrepancies in the system, corruption or mismanagement. The government has been unable to get NSFAS right. It has chopped and changed the scheme’s leadership over the years but problems persist.

Seasoned professionals with impeccable credentials have failed to make NSFAS work. Many have resigned or were fired. But we hardly hear about any of them being sentenced for fraud, theft or corruption.

This is apart from the case of Walter Sisulu University student Sibongile Mani, who was convicted for the theft of R14-million that was accidentally credited to her NSFAS account in 2017.

Mani was sentenced to five years in prison, which was later overturned and changed to a suspended sentence after she appealed. She was found guilty of spending R818,000, whereas she was entitled only to a R1,400 food allowance. There have been several arrests of NSFAS officials in the past, but unlike the Mani case, no outcome has been communicated publicly.

Confusion and controversy

The Special Investigating Unit announced in April 2023 that NSFAS paid R5-billion to 40,000 undeserving students in 76 institutions of higher learning.

The investigation also revealed that there was an alleged syndicate involved in private accommodation which benefited.

Poor financial controls were found to be at the centre of problems at NSFAS, which led to the inability to reconcile annually the funds disbursed to institutions and a list of funded registered students.

This resulted in overpayments and underpayments to different institutions from 2017 to 2023. But these problems have been around since way before 2017.

I recall that the government conducted pilot studies when I started working as an education reporter. This was from 2012 to 2014. The model it was then trying out entailed NSFAS having direct contact with students and disbursing their funds.

Institutions where the pilot was not conducted continued to be responsible for distributing funds through their financial aid offices.

The pilot project was meant to test whether NSFAS could directly interact with students and cut out institutions, which act as middlemen. This was meant to curtail discrepancies and delays in approving funding applications and payment of allowances.

The pilot system did not seem to work. Then things got confusing. It became unclear whether financial aid offices were still functional at some universities and who was actually responsible for disbursing funds. Things continued to limp along.

Then, recently, there was a controversial tender that appointed four fintech companies to pay allowances directly to students.

An investigation into the tender conducted by Werksmans Attorneys and advocate Tembeka Ngcukaitobi SC in August 2023 led to the dismissal of NSFAS chief executive Andile Nongogo by its board for being implicated in irregularities uncovered during the tendering process.

Board chairperson Ernest Khosa, who allegedly is linked to the four service providers, later resigned before Minister of Higher Education, Science and Innovation Blade Nzimande indicated that he was placing NSFAS under administration.

Read more in Daily Maverick: Calls for action after recordings expose alleged cosy relationship between Blade Nzimande, NSFAS chair Ernest Khosa and service providers

I have lost count of how many administrators and boards have taken over NSFAS through the years. It is a revolving door.

But something must change. We need to hear about arrests and the outcome of those cases. The government should not just accept resignations, dismissals and questionable mutual settlements when taxpayers’ money has been misused and the future of so many beneficiaries tragically derailed.

The ripple effects of this failure to act is monumental. Progress is hindered in poor families. Generations of young people in these families remain hopeless and jobless, and some of them drink their lives away in self-pity, their dreams shattered.

At least the government could be seen to be taking a serious step towards rectifying the chaos at NSFAS by acting against officials and councillors implicated in wrongdoing through recovering the funds misused under their watch.

There must be accountability, or NSFAS will remain a cash cow for opportunistic and politically connected people at the expense of our youth.

If it were to work

As beneficiaries, we are required to pay back NSFAS loans. I agree with this policy, even though it took me years to pay off mine. I was someone starting from the bottom and trying to catch up on unresolved legacies dating back generations before me, plus I had my own personal responsibilities.

When I finally did it, I felt good knowing that someone like me would also benefit in turn, that the money was flowing so that others could succeed.

But this endless mismanagement is so disheartening, not to mention making it more difficult for the government to convince others to do the same and pay back the money.

NSFAS is a public good. It can help to protect the lives of young people and bring hope and progress to their poor families. The debate is not whether NSFAS is viable or not. It is. We just need practical, working models, and good people in charge.

There are many positive case studies that confirm how crucial NSFAS is to our society. I’m one of them. DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.

Categories:

Tags:

DM is much better if you are signed in...

South Africa

Endless trouble

Confusion and controversy

If it were to work