In order to make the payment of NSFAS allowances easier and prevent payment delays, the National Student Financial Aid Scheme (NSFAS) introduced a new direct payment solution through the NSFAS MasterCard. This meant that NSFAS-funded students would now be receiving a MasterCard and bank account in which they will receive their monthly NSFAS allowances.
The bursary scheme revealed:
As part of the digital transformation at NSFAS, all NSFAS beneficiaries at universities and TVET colleges will start receiving their allowances and transacting through the NSFAS bank card as of the 2023 academic year.
Although the NSFAS Bank Account started in 2022 for students at Technical and Vocational Education and Training (TVET) colleges, it was only recently implemented for university students.
Previously, NSFAS distributed funds for students to universities, and the money would then be distributed to NSFAS students.
Students reject new NSFAS payment system
In May, student leaders from various universities said that they were rejecting the scheme’s plan to take over the payment of NSFAS allowances from universities as they marched to the NSFAS head office in Cape Town.
According to the bursary scheme the new system was introduced to ensure that funded students receive their allowances for food, transportation, and other living expenses in a secure and seamless way.
However, students have already expressed frustration noting that the onboarding process has been everything but ‘seamless’, with some questioning communication around the new system, high banking service costs and why it was implemented at universities in the middle of the academic year.
Student organisations step in
The Socialist Youth Movement says it is rejecting the new banking system for students funded by NSFAS.
National Coordinator, Raees Noorbhai says the primary issue some beneficiaries are having with the new NSFAS bank accounts includes perceived exorbitant banking fees from the payment-facilitating partners that the scheme has onboarded.
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.
This isn’t the first crisis this year, we have crises year after year, concerning NSFAS and the payments of allowances, concerning delays and there’s constantly a disregard for the material suffering of students.
Noorbhai says currently the NSFAS banking service providers are charging R29 for a monthly bundle fee for which other banks charged R10 and are charging R12 per R100 for ATM withdrawals while other banks charge R7.50 per R1,000.
Last week, the EFF Student Command wrote to Higher Education Minister Blade Nzimande over several challenges in the higher education sector, including the new banking system, where they highlighted the exorbitant banking costs, labelling them “illogical and unreasonably high”.
The students of South Africa are beginning to run out of patience, and if our letters keep falling on deaf ears, we will be left with no other choice but to exercise our democratic rights and take them to the streets.
They stressed that every time a student needed to “buy bread, sanitary towels and toiletries they must think twice because the transactional fees are so high”.
In addition, they also questioned the use of banking businesses which did not have the required banking licences. "There are equally very strong allegations that some of these service providers have been awarded tenders to distribute allowances to students on behalf of NSFAS have no meaningful experience in the financial aid sector, " added the student command.
On Wednesday afternoon (5 July), Minister Nzimande, said, that in light of the “numerous social media queries” about NSFAS, he has directed NSFAS management to clarify all the concerns raised by students and student organisations.
He said NSFAS “was working towards having a media engagement soon” about the concerns raised.
To find out more about the NSFAS bursary, applications and the latest changes, head to our NSFAS page.