NSFAS Pays August Allowances Through Direct Payment System


The National Student Financial Aid Scheme is once again under investigation, this time from the Public Protector. This comes just after August 2023 allowances were distributed using the new direct payment system. 


The National Student Financial Aid Scheme (NSFAS) has recently confirmed that student allowances have been paid for the month of August 2023. The bursary scheme made the announcement on Monday this week, via Twitter.

According to the bursary scheme, over 300 000 student beneficiaries at South Africa's multiple public universities have received their allowances from 31 July 2023, while around 98 000 beneficiaries from TVET colleges received theirs from 25 July 2023.

TVET college students allowances came to over R380 000 000 while university students came to a total of more than R600 000 000 paid.

The New Direct Payment System, Explained

NSFAS recently made the transition of depositing student allowances using a new direct payment system, and this was one of the successful instances of using the new system.

NSFAS partnered with four banking service providers to bring the new payment solution to students. These service providers include Tenet Technology, Coinvest Africa, Ezaga Holdings and Norraco Corporation.

Students had to upload their registration data in order to make use of this new system and receive their monthly allowances, that are meant to be used for groceries, study materials, and transport, amongst other things. Additionally, the new payment system involves using new NSFAS Mastercards and bank accounts. 

However, the implementation of the new direct payment system has not been entirely well-received by students and stakeholders alike, leading to an investigation to be conducted by the Public Protector.

Student Complaints and Investigation Findings 

Since its implementation, there have already been a number of complaints about the system, including students not receiving their funds, exorbitant bank charges, glitches, and unauthorised access resulting in loss of funds. 

The investigation comes after Stellenbosch SRC Vice Chairperson, William Sezoe, lodged a complaint asking the public protector to look into the awarding of the contract for the new NSFAS direct payment system.

Sezoe explains:

I have last week written to the public protector to investigate the National Student Financial Aid Scheme direct payment system and in particular the involvement of the CEO of NSFAS with the awarding of the specific tender.

Sezoe says that in his complaint he highlighted concerns around three critical issues:

  • The involvement of NSFAS CEO, Andile Nongogo in the tender awarding process, considering his relationship with the directors of

Coinvest, raises legitimate doubts about the fairness and impartiality of the selection procedure.

  • The decision to award tenders to companies lacking financial licenses warrants clarification from NSFAS, as this poses serious doubts about their ability to handle students’ funds responsibly; and
  • The justifiability of appointing companies charging exorbitant fees to students requires scrutiny, as it affects public funds, especially those allocated for education.

The investigation also found that NSFAS CEO, Andile Nongogo had an alleged “business relationship” with the directors of one of the service providers – Coinvest.

In addition, some students have already expressed frustration noting that the onboarding process has been everything but ‘seamless’, with some questioning communication around the new system and why it was introduced at universities in the middle of the academic year.

Sezoe adds, “It is unjustifiable that students have to cut their allowances to access them and be able to live in a country where the cost of living is already high,”

It is unacceptable that NSFAS is charging students they ought to serve. It is unacceptable, hence we will await the outcome of the investigation and the public protector must make sure education funds are protected.

NSFAS' Response 

In its recent statement, NSFAS said:

The scheme will continue to utilize the new system to adequately pay allowances to deserving students, despite the ongoing [and] deliberate media smear campaign to discredit the payment platform. 

The bursary scheme added that law enforcement agencies will be made use of, if "actions escalate to crimes of defamation." 

Continuous Allegations of Fraud within NSFAS 

Unfortunately, NSFAS has regularly been at the forefront of disgruntled students and allegations of funds mismanagement. 

Earlier this year, it was revealed that around R5 million in NSFAS funds were wrongly allocated to students who did not qualify for the bursary scheme. 

We [NSFAS] can confidently confirm that claims circulating across various digital media platforms stating that NSFAS paid wrong and large amounts of money to students are simply untrue and are being spread to deliberately discredit the new system. 

NSFAS has continuously doubled-down on denying the allegations, often referring to the drama as "unlawful and baseless claims". 

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