NSFAS 'an embarrassment' - Parliament sets two-week deadline to resolve critical issues

On Wednesday, the National Student Financial Aid Scheme briefed Parliament’s portfolio committee for higher education. (Photo: Qaqamba Falithenjwa)

By Marecia Damons

7 Sep 2023

The scheme has had more than 170,000 appeals from students about allowance payments.

The National Student Financial Aid Scheme (NSFAS) was grilled in Parliament on Wednesday by the portfolio committee for higher education over its ongoing failures in the payment of student allowances. NSFAS was briefing the committee on its disbursement of allowances to students, the roll-out of its new direct-payment system, and its query system.

Chair of the committee Nompendulo Mkhatshwa (ANC) opened the meeting with harsh words for the funding scheme. “This entity, with the mandate it has, should be the best-run entity in the country … but right now it is not. It’s an embarrassment.”

Read more in Daily Maverick: NSFAS to investigate complaints after students vent frustration over new direct banking system

Last month, NSFAS announced that its CEO Andile Nongogo had taken “a leave of absence” while the board investigated allegations against him related to his conduct in awarding bids at NSFAS.

NSFAS briefing On Wednesday, the National Student Financial Aid Scheme briefed Parliament’s portfolio committee for higher education. (Photo: Qaqamba Falithenjwa)

According to the Organisation Undoing Tax Abuse (Outa), NSFAS hired businesses without banking licence registrations to handle direct payment to students, and these businesses charged much higher rates than commercial banks. Outa started exposing the irregularities as early as September 2022.

“I want to emphasise this point: in our books, he (Nongogo) has not been found guilty of anything,” said NSFAS chair Ernest Khosa.

“We are conscious of all the challenges NSFAS is facing. We have seen the protests and read articles in the media. We have constantly received instructions from our shareholders for greater accountability.”

He said the fund had disbursed R32-billion to universities and Tvet colleges. Its annual budget is “just under” R50-billion.

Read more in Daily Maverick: Human Rights Commission urged to probe claims of shambolic distribution of NSFAS funding scheme to poor students

NSFAS acting chief operations officer Vuyokazi Mafilika said the fund had received 170,683 financial and academic appeals from first-time and returning students who were defunded or rejected. Of these, 58,924 students were funded again; 6,337 applicants were rejected; 28,971 were “deemed invalid” because of withdrawn, deleted and duplicated appeals.

A further 44,561 appeals are dependent on institutions to load academic results and on applicants to upload missing information; the remaining 31,890 are “in progress”.

Mafilika said for next year’s application process “NSFAS will take 72 hours to make funding decisions for all students”. It also plans to digitise the application process so that “there will no longer be manual applications”.

But parliamentary members were sceptical of NSFAS’s ambitious plans.

Karabo Khakhau (DA) said NSFAS needed to be reminded that the majority of the students they fund are poor.

“Students live in communities where they don’t even have access to cell phones. They depend on those manual application systems.

“I’m struggling to understand how you are suddenly going to have the capacity to have a 72-hour turnaround response time to students … You’re already struggling with everything right now, so where do you get the confidence to think that you have the capacity to do this in 2024?” asked Khakhau.

Mandla Shikwambana (EFF) said at least 1,300 students at Free State University still haven’t received their allowances since March.

“Students go to universities to study. You don’t pay their accommodation, food or transport. Then they fail and get defunded. Can you please try to be human beings? Our kids are struggling on the ground.”

Walter Letsie (ANC) said, “Your contact centre should be called an uncontactable centre. That division is doing nothing to help students. They are sometimes waiting up to two hours on the line.”

He said the committee had met five times with NSFAS this year about the same issues.

“It’s September, but you’re telling us that you have 44,000 appeals that depend on the institution and missing documents. From February to now, where are these kids getting food from?” he asked.

NSFAS acting CEO Masile Ramorwesi said the fund had received 2.1-million applications from first-time and recurring applicants. Of these 24% were rejected; 2.4% withdrawn; 62% accepted; and 11.6% pending, largely due to missing information from students, third parties, or institutions.

Ramorwesi said 45,927 students were disqualified for submitting falsified or fraudulent documents. He confirmed that after NSFAS re-evaluated the applications, 14,703 applications were reinstated, while 31,224 remained disqualified. The main reason for disqualification was that most first-time entering students had a household income of more than R350,000, while returning students either did not meet the required academic progression — which is 50% of all registered modules — or exceeded the minimum number of years allocated to achieve the qualification.

Ramorwesi admitted the new payment system had caused issues, but said “any new system in its year of first implementation experiences challenges”.

Ramorwesi said NSFAS plans to resolve all internal appeals by 30 September. Appeals that are dependent on the student or institution will be resolved by 30 October.

The committee gave NSFAS a two-week deadline to present a plan for how it will resolve the issues raised in the meeting. DM

First published by GroundUp.

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