NSFAS battles backlogs, staff and tech woes as MPs criticise R2m rent for swish Cape Town offices

Gaolatlhe Kgabo, a higher education portfolio committee member, at the NSFAS committee meeting in Cape Town on 21 August 2024. (Photo: Lisakanya Venna)

By Siyabonga Goni and Lisakanya Venna

22 Aug 2024

‘It is better that we decentralise NSFAS and take it down to provinces, so that each and every province is able to deal and resolve its own issues especially around the appeals,’ says Parliament’s higher education portfolio committee member Gaolatlhe Kgabo.

The National Student Financial Aid Scheme (NSFAS) is battling to ease the backlog of student queries and appeals with a designated staff of between 80 and 86.

Members of Parliament’s Portfolio Committee on Higher Education have expressed shock at what they described as a small number of staff who have received more than 90,000 appeals since April 2024, with each employee only able to respond to 100 per day.

University and TVET students send appeals to NSFAS if their funding has been cut off due lack of documentation such as parents’ IDs, South African Social Security Agency consent forms and South African Revenue Service showing the income of parents or guardians.

A total of 35,226 appeals remain unresolved, but NSFAS anticipates finalising them in the first week of September 2024.

On Wednesday (21 August) the committee received the first quarterly report from NSFAS administrator Freeman Nomvalo, which covers updates on handling student appeals, processing accommodation payments and preparing for the 2025 application cycle.

Still under administration, NSFAS presented the report during a tour of its offices in Cape Town where the committee learnt that the scheme has between 80 and 86 staff who deal with student queries and appeals.

NSFAS occupies five floors of the luxurious 21-floor Halyard building.

NSFAS National Student Financial Scheme administrator Freeman Nomvalo fields questions during an NSFAS committee meeting in Cape Town on 21 August 2024. (Photo: Lisakanya Venna)

In March 2022, the Organisation Undoing Tax Abuse discovered that NSFAS had signed a five-year lease with Dynamic SA Holding for the office space. The lease, backdated to start on 1 February 2022, was supposed to be for two years with an option to extend for three more. Rent over that period for the 8,479-square-metre premises is R166.906-million, including VAT and increases. Previously, NSFAS paid R603,000 a month for a building in Wynberg, Cape Town, which is just more than R7-million a year.

Read more: NSFAS — the state bursary scheme at the root of SA students’ outcry in 2023

On Wednesday, committee chairperson Walter Letsie told Daily Maverick that NSFAS should rethink its office space because money spent on expensive buildings could be used to hire staff.

“They’ve hired a building where they pay above R2-million every month. You cannot stay in this office and say they do not have staff to solve problems. They can look for an office at the Department of Public Works for a cheap rate and take this budget they are paying for lease to increase their staff,” Letsie said.

Committee member Mandla Shikwambana (EFF) told the administrator that the staff shortage was a problem and NSFAS’ offices needed to be decentralised. “We have been speaking about this. Can’t we decentralise these offices? Because here you are stuck and cannot respond to students’ queries.

“We used to have NSFAS offices on our campuses… within a few hours, a day or two, our matters were resolved, but now we are stuck,” Shikwambana said.

Nomvalo – who was appointed as administrator in April and is a former South African accountant-general and previous CEO of the South African Institute of Chartered Accountants – said the backlog in dealing with appeals had accumulated over the past few years.

“Once we are done with the backlog we are also trying to improve the systems so that we can deal with the appeals as they come through… From yesterday to today we dealt with 3,930 appeals… up until nine o’clock in the morning we received 113 appeals.

“As soon as we have the number of appeals that we are dealing with versus the numbers that are increasing with being on the favourite side, means that we are dealing with more appeals than we are receiving,” Nomvalo said.

Nomvalo was appointed by former higher education minister Blade Nzimande after he dissolved the NSFAS board in April.

Read more: NSFAS boss Freeman Nomvalo promises fresh processes and payment system by September

The matter of increasing staff, Nomvalo told Daily Maverick, was still to be studied but there were areas that needed an increase within NSFAS.

Fasiha Hassan (ANC), a lawyer and former student activist, said there needed to be accessibility to NSFAS offices for students, which was why decentralisation was important.

“If a student has a problem and they are unable to get hold of NSFAS, there must be some sort of facility in the different areas that number one, make it accessible, but number two, are also cost effective. You do not want young people to have to go through the headache of trying to find an office that is very far away,” Hasssan said.

NSFAS Gaolatlhe Kgabo, higher education portfolio committee member, at the NSFAS committee meeting in Cape Town on 21 August 2024. (Photo: Lisakanya Venna)

Accommodation

According to the administrator, NSFAS has paid a total of R1.6-billion for private accommodation at pilot institutions this year. Of this, R311-million had gone to accommodation providers at accredited TVET colleges, while R1.297-billion had been allocated to NSFAS-accredited university accommodation providers.

However, the scheme had been falling behind in accommodation payments – the report cites incorrect invoices, lease agreements that are not signed on time by students and landlords, and late funding decisions by NSFAS.

Deputy Minister of Higher Education and Training Buti Manamela told Daily Maverick that students also need to be transparent about how they spend the money they receive from NSFAS.

“If students are given money to pay for accommodation, they must pay, same as for food and lifestyle. The money must go where it is intended to go. We tend to conceive corruption as acts that are done by politicians, but if you are a student and you get money from NSFAS… and you don’t use it for the intended purpose, that’s corruption,” Manamela warned.

According to Nomvalo, NSFAS has cleared 80% of student accommodation payment queries.

ICT systems

NSFAS also still faces problems with its information and communication technology (ICT) systems. According to the report, the security risk of NSFAS systems is highly questionable. Nomvalo told the committee the ICT systems were not working well and were vulnerable to cyberattacks.

“Some of the things we have picked is that it is possible that information relating to students could be vulnerable to abuse.”

NSFAS has announced that problems at TVET colleges have been addressed, including the direct payment system to students and enhancements to the application process for the coming year.

The scheme’s new application cycle for 2025 student funding is set to run from 1 September to 30 November. DM

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