The National Student Financial Aid Scheme (NSFAS) has confirmed that NSFAS allowances will be paid to students using the Direct Allowance Payment System. This decision comes despite the scheme’s intention to terminate the service providers contracted to facilitate the payments to students.
NSFAS has anticipated that it will fund more than one million students in 2024. Funding from NSFAS includes money for tuition and registration fees. In addition to this, students also receive several allowances.
In 2023, University students began receiving these allowances through the newly implemented Direct Payment Service.
However, an investigation into the appointment of the selected service providers found that former NSFAS CEO Andile Nongogo actively participated in the presentation to the Bid Evaluation Committee (BEC) of proposals by service providers. This is a material violation of the public procurement processes of NSFAS which he was employed to safeguard and uphold.
There are indications two fintech companies had a “possible relationship” with Nongogo. These companies were Coinvest and eZaga.
One of the recommendations of the Werksmans report was that NSFAS terminate the contracts of the four service providers Ezaga Holdings, Coinvest Africa, Norraco Corporation, and Tenet Technologies.
While NSFAS indicated in 2023 that they will be terminating the contracts with service providers, the financial aid scheme has confirmed that millions of rands in NSFAS money will flow from the government bursary scheme to students, through the channels provided by these service providers.
The NSFAS Board has reiterated the decision to terminate direct payment service providers following the Werksman Attorneys Report. However, while these legal processes are underway, they will continue to distribute millions of rands in NSFAS allowance to students.
While the legal process is underway, the Board has decided that, in the transitional period, these direct payment service providers continue to onboard and disburse allowances to students.
NSFAS said Universities and TVET Colleges will continue their collaboration with the designated direct payment service providers allocated to their respective institutions for the purpose of onboarding and disbursing allowances to students.
The financial aid scheme called on institutions to adhere to the current arrangement to ensure the smooth facilitation of allowances.
It is imperative that institutions adhere to this directive to ensure the smooth facilitation of student allowances.
Must New Students Register For Direct Allowance Payments?
All new students will be required to register for the Direct Allowance Payment System. Student are reminded to register with the service provider allocated to their institution. NSFAS said all students must complete the onboarding process within ten days of their registration.
According to section 6.3.13 of the Funding Guidelines, students who are funded by NSFAS must onboard for direct payment within ten days from their academic term registration date.
NSFAS Upfront Payments
NSFAS provided upfront payments to universities and TVET colleges to ensure that students have access to allowances during the first portion of their 2024 academic year.
In January 2024, R2.8 billion was disbursed to universities, excluding tranche payments due in April 2024. This covers one month of student accommodation and half the book allowance.
For universities, NSFAS disbursed R2.8 billion in January 2024. This disbursement does not include the calculation of the tranche payments, which NSFAS will disburse at the beginning of April 2024
For TVET colleges, R580 million was paid upfront for tuition, with an additional R1 billion allocated for three months’ allowances based on January-March registration.
These payments aim to facilitate the registration of all NSFAS-approved students for the academic year 2024.
All these upfront payments are meant to enable institutions to register all NSFAS-approved students for the academic year 2024.
