The National Student Financial Aid Program (NSFAS) will meet with student organizations and service providers on Tuesday, July 11, following students’ unhappiness and anger over a new direct banking system. The new system has caused discontent with students over delayed payments, with organizations calling for help from parliament and threatening to take to the streets over high bank fees.
The meeting was announced by NSFAS on Monday, 10 July, after meetings with the South African Students’ Union (SAUS) and the South African Students’ Congress (Sasco) over the weekend.
Over the past two weeks, students and student organizations have raised concerns about the lack of communication and rising bank fees related to the new direct banking system that the aid program is implementing.
Read more at The Daily Maverick: “Uncertainty, worry and frustration” – NSFAS students weep over the new banking system
On Monday, NSFAS said the issues raised by the students about the direct banking system, which was officially implemented on June 1, will be discussed at the meeting.
The direct banking system, NSFAS said, would “ensure … accountability for student allowances and … create a better-coordinated system for transferring funds to students.”
The NSFAS gave an example to students who received wrong payments, such as Sibongile Mani who in 2017 had R14 million deposited into her account by the fund. Manny was found guilty of theft in 2022 after spending R818,000 in Shopping Help Scheme money, News 24 mentioned.
NSFAS takes accountability
“NSFAS … will not hesitate to act in cases where partners’ performance is not in line with the expected output,” said the aid scheme.
She said she took direct responsibility for the actions of her partners. “NSFAS expects that the new system will not only be convenient for students, but also provide allowances in a reliable and predictable manner for students.”
NSFAS said that in its dealings with Sasco, SAUS and other platforms, it has been made aware of issues including excessive banking changes, lack of access to service delivery providers and lack of clarity on how to access funds.
NSFAS said complaints would be investigated and “appropriate action taken.” Service providers will be directed to increase their physical presence on campuses so that they can respond to inquiries.
Undo Tax Abuse (Outa), which has been investigating the NSFAS since 2022, alleged in February that students on the financial aid scheme could pay higher bank fees than students with business bank accounts, such as R29 for a monthly package fee and others. Banks charge R10.
See Outa’s breakdown of NSFAS account costs versus those of other banks here.
Ohta also alleged that of the four NSFAS service providers, only one had a banking license, while only two of the four were registered VAT vendors.
University students and student organizations have warned that they will take to the streets if the problems are not resolved.
Democratic Alliance on Higher Education spokeswoman Chantelle King said the party had written to Higher Education Minister Dr Blade Nzimande and to the Banking Association of South Africa (BASA) about the direct payment scheme.
“We hope BASA can clarify the cost structure of well-established banks, and whether Coinvest Africa, Tenet Technology, Ezaga Holdings and Norraco Corporation are approved financial service providers,” she said. The party also wanted Nzimande to respond to the findings of OTA’s investigative report. DM