The National Student Financial Aid Scheme (NSFAS) is currently under fire following the rollout of a new direct banking system, which has left many students frustrated and angry over high bank costs and delayed payments.
The NSFAS Mastercard introduction
Last year, Higher Education Minister Blade Nzimande introduced the new NSFAS Mastercard with the aim of having a secure and student-centred approach that will see students receive their allowances through a bank card. These allowances include book allowances at the beginning of the year, personal care allowances, travel allowances, and living allowances.
Starting from June 2023, university students funded by NSFAS were asked to register with the provided services in order to start receiving their allowances directly.
NSFAS said that beneficiaries will only incur a monthly charge of R12 on their NSFAS bank account, granting them the freedom to utilize their allowances in a personalized way that suits their needs.
NSFAS Mastercard cost structure:
– R12 per month for transacting
– Card replacement, approximately R60
– Delivery charges will be R50
– Resetting the PIN will incur a fee of R8
– An ATM decline will cost R8
– An ATM swallowed card will cost R20
With the new system, NSFAS beneficiaries must choose from four service providers, Coinvest Africa, Tenet Technology, Ezaga Holdings, or Norraco Corporation, to access their funds using the recently introduced NSFAS Mastercard.
However, since university students started using the new payment system, several challenges have arisen, such as delayed payments and increased bank charges, which have prompted some students to contemplate protesting against these flaws.
The Organisation Undoing Tax Abuse (OUTA), in a recent report, discovered that the four service providers:
- Coinvest Africa
- Tenet Technology
- Ezaga Holdings, and
- Norraco Corporation
are inexperienced companies. The report also mentioned that many established and trustworthy banks had applied for the opportunity but were not chosen.
Now, the DA has come in to question the reasons behind choosing these service providers over established banks, while also raising concerns about the application requirements for financial institutions to offer direct payment services.
As a response to these concerns, NSFAS will this week have a meeting with student organizations and service providers. Furthermore, they will investigate the complaints and take appropriate action. The service providers will be advised to have a stronger presence at universities to address any queries effectively.
“The NSFAS assumes direct accountability on the actions of the current partners. NSFAS expects the new system to be not only convenient to students but also to provide for allowances in a manner that is both dependable and predictable to students. It is expected that all students should receive their allowances by a prescribed date of the month and that there should be no room for long lapses of time due to delayed transfers between the University and NSFAS,” the scheme said.
“Students are urged to complete their onboarding process to speedily access their NSFAS bank accounts by going to the NSFAS website, under the heading “For Students and Learners” click on NSFAS Bank account (under student support). There they will find the name of their institution and can click on the register here button and then follow the prompts,” it adds.
NSFAS on defunded students and direct payments
The scheme on Monday, 11 July 2023 made an announcement stating that it has started a corrective procedure where students who were funded due to incorrect information will be promptly removed from receiving financial aid.
NSFAS said this is done to avoid wrongful and illegal allocation of funds to students, like the highly publicized R14-million scandal.
“The prescriptions of our policies and the law will be implemented firmly and vigorously to avoid a repeat of the more than R5 billion that was allocated incorrectly to students since 2016,” NSFAS said.
“The NSFAS decision is in response to the auditor-general’s findings and a Special Investigation Unit (SIU) investigation, which revealed that more than R5 billion was paid to the students who did not qualify for bursaries,” it adds.
This is a developing story, be sure to stay tuned for more updates.