Madonsela calls on Lamola to recover R5.1bn used by NSFAS to fund ‘unqualifying’ students

Former public protector Thuli Madonsela has called on justice minister Ronald Lamola to implement measures to urgently recover the money used by the National Student Financial Aid Scheme (NSFAS) to fund “unqualifying” students between 2018 and 2021.

The Special Investigating Unit (SIU) this week revealed the NSFAS paid just more than R5.1bn to “unqualifying” students. It revealed 40,044 students in 76 higher education institutions were “unduly funded” by the scheme.

“These are students whose household income is above R350,000 and therefore would not qualify for NSFAS funding based on the funding rules,” said SIU chief national investigations officer Leonard Lekgetho. 

Madonsela said the money could be used to fund student debt, accommodation and school infrastructure, among other things. 

“During my term as public protector, I advocated for giving priority to measures to get back the money expeditiously. Can we do so on this and state capture looting? This could fund student debt, student accommodation, school infrastructure etc,” said Madonsela.

She said “missing middle concerns” were valid. 

“That’s why Stellenbosch University has projects such as the rector’s Bridge The Gap and Action4Inclusion initiative, which is our partnership project with the SRC that has seen dozens of students reregister and graduate. But theft exists and is wrong.”

The SIU started investigating NSFAS affairs in September 2022 after a proclamation issued by President Cyril Ramaphosa a month earlier.

The proclamation mandates the SIU to investigate alleged serious maladministration in connection with the affairs of the NSFAS, improper or unlawful conduct by the employees or officials of the scheme, unlawful appropriation or expenditure of public money or property, unlawful, irregular or unapproved acquisitive act, transaction, measure or practice having a bearing upon state property and intentional or negligent loss of public money or damage to public property, among other things.

“These are students whose household income is above R350,000 and therefore would not qualify for NSFAS funding based on the funding rules. These students did not submit their parents’ details upon application and therefore the means test was not properly conducted,” said the SIU. 

The SIU also facilitated a refund or managed to ring-fence about R38.3m possibly due to the NSFAS from three TVET colleges. Two of the colleges are in the Western Cape and one in Mpumalanga.

“The SIU is in the process of engaging other institutions to determine if they are holding any overpayments that need to be ring-fenced pending the finalisation of the investigation,” said the investigating unit.

“The investigation shows that NSFAS failed to design and implement controls that would ensure there is an annual reconciliation between the funds disbursed to the institutions and the funded list of registered students.

“This control weakness led to overpayments and underpayments of funds to the different institutions for the period 2017 to date. To remedy this, NSFAS has recently appointed a service provider to assist them perform this reconciliation in a process called ‘close out reporting’.”

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