/ 7 August 2023

NSFAS urges unpaid students to get accredited to avoid ‘ghost payments’

Ernest Khosa
NSFAS board chairperson Ernest Khosa. (OJ Koloti, Gallo Images)

The National Student Financial Aid Scheme (NSFAS) has appealed to thousands of students who have had bursary funding problems to accredit themselves on its system to avoid “ghost payments” and for universities to collaborate with the agency to expedite the process.

NSFAS board chairperson Ernest Khosa made the call during a media briefing on Monday in which he highlighted NSFAS’ funding situation following weeks of student protests about suspended and delayed payments across the country.

Khosa said NSFAS had completed funding decisions for applications received for the 2023 academic year and was disbursing allowances to students whose funding has been confirmed through its new direct payment system. 

He said it was vital for students to confirm their identity and accreditation with the scheme to avoid ghost payments which previously led to R5.2 billion funding being paid out fraudulently.

“The disruptions in learning activities for our beneficiaries in universities and Technical and Vocational Education and Training (TVET) colleges is not something the scheme takes lightly. These interruptions have been mainly to the changes in policies and guidelines that govern how the system disburses funds to students; more especially the new allowance payment system introduced by NSFAS,” Khosa said.

However, he said the new system, aimed at providing a secure platform to ensure all deserving students receive funding while preventing fraudulent payment, had been implemented after wide consultation with student leaders and universities since September 2021.

“It is worrisome that the disturbances are attributed to an insinuation that NSFAS is imposing system changes. We pride ourselves in being an organisation that promotes accessibility and consultation,” he said.

In 2017, NSFAS had started implementing its student-centred model that places the needs of students at the heart of the scheme’s operations to streamline the disbursement of funds for tuition, transport, food and accommodation.

He added that the scheme was “ultimately responsible” for its products and services and the direct payment solution allows it to have full sight of funds disbursed.

“NSFAS beneficiaries have received correct allowance amounts based on registration data and claims submitted by institutions. The images of incorrect amounts deposited into students’ accounts doing the rounds are fake and have been altered to suit that narrative,” Khosa said.

“It is factually incorrect that there are charges related to logging onto the app to access one’s account details or additional charges when withdrawing money at retail stores, other than what has been indicated.”

He said the system is secure and provides students with peace of mind in knowing that they can hold NSFAS accountable for non-payment or late payment.

“It works like a bank account and has all the security features of a bank card offered by the retail banks, students need not transfer to a different account.”

However, he added that as part of the “ongoing attacks to discredit the system” there had been targeted cyber-attacks on the websites of fintech companies hosting its beneficiaries’ accounts.

“NSFAS is investigating such cases and will involve the assistance of law enforcement agencies,” he said.

He said NSFAS had so far paid a total of 355 270 students, which constitute 86 % of those who have successfully authenticated themselves and received their allowances.

“NSFAS is reviewing and assessing the remaining students that were paid but unable to access their funds because they had not fully authenticated themselves. We note that

some students have experienced connectivity issues and NSFAS has sent teams to campuses to assist with the authentication and verification process,” he said.

He said a total R608,601,526.00 was paid to NSFAS beneficiaries at public universities while a total of R383,671,046 was paid to TVET colleges for the month of August alone.

He added that after a thorough investigation and considering third party data sources such as Sars and the auditor general, NSFAS had defunded a total of 45 927 students.

“Investigation results indicated some applicants were not deserving of the funding and had submitted falsified or fraudulent documents. These had to be instantly defunded,” Khosa said.

He said some students had provided correct parental relationships in their first application attempt, and when they get rejected due to the financial status of those parents they reapply submitting different parental relationships.

“When we did (a) re-evaluation, our system picks up the original information previously submitted.  And after re-evaluation funding was reinstated for 14 703 and 31 224 remained unsuccessful, with most first-time entering students having a household income of more than R350k and returning students not meeting the required academic progression,” he said.

Khosa said students could appeal these decisions and he urged students who had not received funding or could not access payments to verify their accreditation.

However, the board of directors of Universities South Africa (Usaf) said it was “deeply concerned about the key challenges” created by NSFAS which would place universities at risk of instability and deeper debt.

“Their speedy resolution is paramount for the well-functioning of the higher education sector. As we write, several institutions in the sector affected by the new NSFAS allowance system, defunding, and accommodation capping, face violent protests. Some of them have been forced to either halt planned face to face academic activity or resort to online learning in order to save the semester,” Usaf said.

Usaf said the defunding of students in the middle of the academic year had caused challenges for students and universities.

“NSFAS has provided neither the reasons for the revocation of student bursaries nor a mechanism of appeal for the defunded students. Those students who have tried to reach NSFAS have been unsuccessful. This is a source of frustration among students and staff alike, and an instability at universities.”  

Usaf said it had “taken issue” with NSFAS’ decision to disburse students’ allowances directly to the students out of concern that the system that NSFAS was implementing had not been tested at universities.

“NSFAS was advised to implement this new system in a phased approach within universities. These direct payments pose a risk of NSFAS continuing to pay deregistered students or those who have stopped attending classes, given that the universities’ databases are not integrated with that of NSFAS,” Usaf said.

Usaf appealed to Minister of higher education Blade Nzimande to resolve the issues.

Student leaders from the Tshwane University of Technology (TUT), the Socialist Youth Movement and the South African Students Congress (Sasco) earlier rejected NSFAS’ new payment banking system, which makes payments directly to students, complaining that there there have been delays in the payment of allowances and that high bank fees are corroding the income. 

University of Pretoria, University of Limpopo and TUT students gathered at the Union Buildings last week where they handed a memorandum of demands to the presidency. They demanded that Nzimande intervene.

Durban University of Technology (DUT) spokesperson Alan Khan said the university had implemented “interim online learning for all programmes, on all campuses” from Monday 7 August “until further notice” following disruptive protests.

“Over the past few days, the university faced unwarranted protests that disrupted lectures and more distressingly, led to instances of intimidation and threats aimed at DUT’s dedicated staff and non-protesting students,” Khan said.

“The university has already identified some of the protestors who had violated its rules and policies. They have since been charged and suspended and they will face a disciplinary hearing. To date, four suspensions have been confirmed. Two hearings are scheduled and another four suspensions are imminent,” Khan said.