ActionSA takes NSFAS direct payment system to court

ActionSA has vowed to block the decision to outsource the disbursement of National Student Financial Aid Scheme (NSFAS) student allowances through service providers it believes are ill-equipped to do the job.

The scheme awarded the contract to four service providers under the guise of “NSFAS bank accounts” to allegedly inexperienced and unlicensed bidders.

The party said it would approach the high court to not only declare the decision irrational, but also to ask the court to set aside the awarding of the contract.

ActionSA legal director Alistair Shaw said the party believed it was in the best interest of taxpayers and students to launch the challenge.

“Our main focus is to prevent NSFAS from becoming a feeding trough for unscrupulous tenderpreneurs whose greed undermines the wellbeing of students,” he said.

The party had identified concerns that drive the legal bid. First, to challenge the “blatant dubious nature of the contact” and to address the immediate burden placed on students, who bear the cost of this “fraud through excessive fee structures”.

ActionSA Western Cape students forum chairperson Matthew George alleged the “NSFAS bank accounts” provided by four inexperienced service providers offer significantly more expensive solutions than those offered by four of the largest commercial banks, all of whom were unsuccessful bidders.

He said they received multiple submissions through their NSFAS complaints database indicating transaction fees charged exceed what can be considered reasonable, in addition to the account fee already debited, adding to the financial strain on students.

“Second, in recognising the impact on nearly 1-million students affected by this rushed and flawed migration to the new system, it is widely agreed that NSFAS neglected to conduct thorough consultations.

“This deprived key stakeholders of the opportunity to provide valuable inputs that could have aided in creating a clear migration plan. As a result, there is widespread confusion among students and university administrators.”

George said the extent of consultations was akin to an after-the-fact exercise as a mere box-ticking tool, citing the last-minute information sessions held by NSFAS representatives days before implementation. It is alleged they failed to address even the most basic questions.

The functionality of the onboarding/registration portals has been disorganised and problematic, he added.

“Students face difficulties in updating contact details and often do not receive the required one-time password for account registration. Site crashes and rejections of identity documentation have also been reported, with one service provider acknowledging this issue arose from NSFAS not providing correct student details.”

Some students had not received their full allowances for more than two weeks due to a flawed onboarding/registration process, causing inconvenience and, more significantly, hardship for those who depend on timely access to their allowances.

It was clear NSFAS and the four appointed companies did not have the capacity to implement the migration, George said.

“In light of these pressing issues, it is crucial to emphasise our intervention is driven by the recognition that the politics of student protests necessitates a significant shift in methodology.”

ActionSA believed in adopting a more pragmatic, proactive and sustainable course of action that ensures the effectiveness of their efforts while considering the intended and unintended implications.

“ActionSA upholds the principle that to truly serve the interests of our constituents we must delve deep to unearth the root causes of problems, unveiling the hidden currents that fuel much of the frustration,” he said.

NSFAS failures were becoming a recurring source of unrest in institutions, the party warned.

“We are resolute in holding accountable those who compromise the interests of students and young people. We will not hesitate to challenge maladministration and corruption.”

TimesLIVE

Support independent journalism by subscribing to TimesLIVE Premium. Just R20 for the first month.