NSFAS sends SOS to varsities

Department of Higher Education and Training director-general, Nkosinathi Sishi.

Department of Higher Education and Training director-general, Nkosinathi Sishi.

Published Mar 4, 2024


The National Student Financial Aid Scheme (NSFAS) board has now turned to universities to assume the responsibility for upfront payments of students’ allowances.

The direct payments of allowances for the 2024 academic year will commence in April, and universities are expected to only administer the payment of allowances for February and March, in a move that the South African Union of Students (SAUS) has urged should be a short-term rather than a permanent solution.

According to the Department of Higher Education and Training director-general, Nkosinathi Sishi, this was apparently to assist while the entity is looking for a long-term solution and dealing with the contract termination of the controversial fintech companies – Tenet Technology, eZaga Holdings, Noracco Corporation and Coinvest Africa.

“I (sought) clarity from NSFAS over who will pay student allowances. “I was aware there was a plan B, Plan A being that the fintech companies will continue paying allowances because they are still contracted, even though there is a process of terminating the contracts, and that is a legal process which is not in the hands of NSFAS,” Sishi said.

“It is in the hands of the Werksmans Attorneys that have now been appointed by (NSFAS), and still have a duty to regularly report to us so that if they are stuck somewhere, the department can intervene.

“The board came back to me and reported that it will be convenient for students and NSFAS that at least for two months, and nothing longer than that, a transitional mechanism for payments is established and that universities be the delegaters since they have the data of all students that are in the process of being admitted.

“They thought the to-and-fro of data between universities and fintech companies (might result in) many students not being paid because they fall in that space of either not yet having been admitted, but funded, or admitted but not yet funded.

“Now they have taken the decision that universities must pay the allowances,” said Sishi.

He said upfront payments had been completed and on Wednesday night a second transfer was expected to be sent to institutions that would amount to about R4.2 billion.

“This would have been transferred to universities to cover registration fees and allowances.

“I have met with Universities South Africa (USAF) to check their readiness to temporarily assist and I must say they were eager. ... They never wanted to relinquish that responsibility in the first place.

“There are also risks that we need to manage because they might be using some service providers to transfer the allowances and this might introduce hidden costs.

“I have made it clear that whatever additional costs that would be incurred beyond what is budgeted for by NSFAS would be at the cost of the institutions,” said Sishi.

The department proposed workshops with all IT or computer science departments to address the issues of systems integration in an attempt to resolve delays in data transfers.

SAUS spokesperson Asive Dlanjwa said they still called for direct payments, but for the current fintech companies to go.

“We are also saying that universities must assist only for a short term.”

USAF said it was not available to comment on the transfer. The organisation represents South Africa's 26 universities.

Last week NSFAS backtracked on its ambitious goal of rolling out the accommodation pilot project at universities, Parliament was told.

The decision was made as more work needed to be done on the accommodation pilot.

Sishi had recognised that the late confirmation of funding both for continuing and first-timers made it difficult for students to conclude registration and receive accommodation allocations in time during orientation and the start of classes.

“The department engaged NSFAS on this matter, and supports exemption of universities in the short term where NSFAS options have not provided sufficient beds. A long-term solution will require universities building more beds, ideally within university campuses.

“There continues to be growing demand for university places across the sector, as more students become eligible.

“Limited places and difficulties finalising admissions for a variety of reasons cause huge anxiety for prospective students and their families and put pressure on institutions,” Sishi had said.

Cape Times