The news that the National Student Financial Aid Scheme (NSFAS) plans to begin paying allowances directly into university students’ bank accounts by September as it heads to court to cancel contracts with irregularly appointed direct payment service providers is welcome.
It is a pity that NSFAS took so long to take steps to cancel the contracts after the board took a decision to cancel them in October last year.
In 2022, NSFAS awarded five-year renewable contracts to Tenet Technology, eZaga, Norraco Corporation and Coinvest Africa to pay allowances directly into the bank accounts of beneficiaries studying at the country’s 26 public universities and 50 technical vocational education and training (TVET) colleges.
The new system aimed to see NSFAS making direct payments into bank accounts using independent service providers, instead of doing it through higher learning institutions. Previously, the allowances were paid by the universities or service providers contracted by them.
There was outcry from students at the implementation of this system last year, which saw lectures at some institutions of higher learning being disrupted. The protests centred on the excessive bank charges levied by the fintech companies under the new system.
Deductions from students' monthly allowance of R1,650 included R12 for banking fees, R10 for ATM withdrawals, and R2.50 for every R100 withdrawn.
The NSFAS board appointed Werksmans Attorneys and Tembeka Ngcukaitobi SC to conduct an investigation into the allegations of irregularities relating to the contract.
The report released in October last year established that CEO Andile Nongogo actively participated in the presentation to the bid evaluation committee of proposals by service providers. This was a material violation of public procurement processes of NSFAS which he was employed to safeguard and uphold.
The report also revealed that there seemed to have been a conflict of interest in the appointment of these four service providers.
The termination of these contracts is hopefully a step in the right direction as NSFAS moves forward to ensure that students in need get paid on time and without any glitches
In October last year, the board said it viewed the direct payment solution as a necessary measure to reduce instances of unauthorised access to beneficiaries’ allowances, payment of ghost students, inconsistencies and delayed payments of allowances. It said the direct payment solution is in line with the student-centred model which NSFAS adopted.
The new administrator of NSFAS, Freeman Nomvalo, has his work cut out for him.
The termination of these contracts is hopefully a step in the right direction as NSFAS moves forward to ensure that students in need get paid on time and without any glitches.
This solution, however, may have been implemented a tad too late. With a day before the elections, students took to social media to remind their fellow students that as they head to the polls, they should remember the struggles they were subjected to amid this debacle.
But what is important is for NSFAS to do what is right for these students, most of whom are from very poor families. They deserve a chance to change the trajectories of their families, given that for some they are the first to get an opportunity to study after matric. This should not be scuppered by corruption or incompetence, elections or no elections.
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