/ 4 March 2024

NSFAS calls on education institutions to act as the middleman for payments

University of KwaZulu-Natal. Photo: Supplied

The National Student Financial Aid Scheme (NSFAS) has requested higher education institutions to assume the responsibility of disbursing student allowances for February and March after problems with its payment methods left many students stranded.

In a media briefing on Monday, NSFAS acting chairperson Lourens van Staden said the scheme had notified institutions of this decision and asked  that they submit registration data to make the payments.

Van Staden said the scheme made two upfront payments to all institutions — one that was disbursed on 31 January and another on 29 February 2024.

The decision by NSFAS comes after students complained that their allowances have not yet been paid.

The South African Union of Students has previously accused the scheme of “plunging the [education] sector into instability and a crisis” by failing to pay student allowances.

Last November, the student union said NSFAS was nearing collapse when the scheme had failed to pay more than 70 000 students their monthly allowances since May 2023 after it switched to a direct payment system.

Nkosinathi Sishi, the higher education department’s director general, said the scheme’s new interim measure will assist students while NSFAS looks for long-term solutions. The scheme has also moved to terminate its contracts with controversial fintech companies — Tenet Technology, eZaga Holdings, Noracco Corporation and Coinvest Africa — which administer direct payment services to students.

“They thought the to-and-fro of data between universities and fintech companies [might result in] many students not being paid because they fall in that space of either not yet having been admitted, but funded, or admitted but not yet funded,” Sishi said during Monday’s briefing.

In January, NSFAS disbursed R2.8 billion to universities. This amount covers student accommodation for one month, as well as the book allowance. NSFAS disbursed more than R580 million to technical and vocational education and training colleges.

Addressing the student accommodation crisis, NSFAS said 30 of the 40 institutions that are part of its pilot project for student housing have been approved for accredited housing. The remaining 10 are still in consultation with the scheme for accreditation.The scheme’s board has rejected calls by students demanding that the accommodation allowance be paid to them and not to the institutions or landlords, saying that “it is not in line with NSFAS funding guidelines”.