/ 13 November 2023

NSFAS denies crisis after thousands of students aren’t paid

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

The National Student Financial Scheme (NSFAS) has refuted claims by the South African Union of Students (SAUS) that it is on the brink of collapse, arguing that it is realigning and modernising to meet the demands of the more than 1 million students it serves.

In a statement, the union said NSFAS was near collapse and had failed to pay over 70 000 students their monthly allowances since the end of May, after it switched to a direct payment system.

“These are students of poor and working-class background. This enormous failure of NSFAS in upholding its mandate to service them with excellence and dignity has exponential consequences,” SAUS said.

“This will subsequently lead to their academic and financial exclusion, further plunging the poor and working class into abject poverty with no prospects of alleviating themselves from the clutches of poverty.”

In response, NSFAS said it was reviewing all the processes and operations of its allowances models and had hired a “new cadre of employees to implement the student-centred model, in which the direct payment system is a key component”.

However, SAUS said the non-payment of student allowances was an indication that the financial aid scheme was not ready for the 2024 intake, underlined by the fact that it had failed to open applications on 15 October.

“This undoubtedly is not only a cause for concern but a crisis because it guarantees us that NSFAS will most definitely not be ready for the start of the academic year 2024, further plunging the sector into instability and a crisis,” SAUS president Yandisa Ndzoyiya said.

In a letter dated 4 November, Higher Education, Science and Innovation Minister Dr Blade Nzimande gave the NSFAS board three weeks to submit a comprehensive report on its service delivery.

The minister’s letter follows an investigation by Werksmans Attorneys into irregularities, poor governance and mismanagement at the financial scheme after thousands of students were left stranded due to non-payment of their stipends.

“This must inevitably include close monitoring of the very important service delivery aspects, which include the timeous payment of student allowances, as well as the continued accreditation of student accommodation,” said Nzimande.

In October, NSFAS axed its CEO Andile Nongogo over allegations of corruption, fraud and illegal tender dealings after a forensic report by Werksmans alleged he had a relationship with one of the companies appointed for the new direct payment system.

Nongogo, in turn, has implicated NSFAS chairperson Ernest Khosa in some of the alleged dodgy activities, saying that during his suspension, his electronic signature was used without his authorisation to issue student accommodation off-take and 12 agreement letters were sent to potential service providers. Khosa has denied the allegations.

Meanwhile, the former CEO has approached the labour court in Braamfontein In an attempt to get his job back, claiming that his employment was terminated in breach of his contract.

“Reinstatement is the only remedy that would ensure that the material provisions of my employment contract are honoured,” Nongogo said.

SAUS has given the minister 14 days to act against the “inability of the board to provide effective oversight in ensuring that NSFAS upholds its mandate” and to ensure that the NSFAS 2024 applications are opened.