South Africa


NSFAS to investigate complaints after students vent frustration over new direct banking system

NSFAS to investigate complaints after students vent frustration over new direct banking system
Students march to the National Student Financial Aid Scheme's (NSFAS) head office on 24 May 2023 in Cape Town, South Africa. (Photo: Gallo Images / Brenton Geach)

The National Student Financial Aid Scheme will this week attempt to resolve issues over a new direct banking system which has left students frustrated and angry over high bank costs and delayed payments.

The National Student Financial Aid Scheme (NSFAS) will meet with student organisations and service providers on Tuesday, 11 July, following unhappiness and anger by students over a new direct banking system. The new system has left students upset about delayed payments, with organisations calling for assistance from Parliament and threatening to take to the streets over high bank charges.

The announcement of the meeting was made by NSFAS on Monday, 10 July, after meetings with the South African Union of Students (SAUS) and South African Students Congress (Sasco) over the weekend. 

For the past two weeks, students and student organisations have raised concerns about a lack of communication and high bank charges related to the new direct banking system implemented by the aid scheme. 

Read more in Daily Maverick: ‘Uncertainty, anxiety and frustration’ — NSFAS students cry foul over new banking system 

On Monday, NSFAS said the issues raised by students over the direct banking system, which was officially implemented on 1 June, would be discussed at the meeting.

NSFAS said the direct banking system would “ensure … accountability on student allowances and … establish a better-coordinated system of the transfer of funds to students”. 

NSFAS made the example of students who received erroneous payments, like Sibongile Mani who in 2017 had R14-million deposited into her account by the fund. Mani was found guilty of theft in 2022 after spending R818,000 of the aid scheme’s money on shopping sprees, News24 reported. 

Students gather at Cape Peninsula University of Technology before a march to the National Student Financial Aid Scheme’s head office on 24 May 2023 in Cape Town, South Africa. (Photo: Gallo Images / Brenton Geach)

NSFAS takes accountability 

“NSFAS will … not hesitate to act in cases where the performance of partners is not in line with the expected output,” said the aid scheme. 

It said it had assumed direct accountability for the actions of its 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.” 

NSFAS said that in its engagements with Sasco, the SAUS and other platforms, it was informed of issues including excessive bank changes, inaccessibility of service delivery providers and a lack of clarity on how to access funds. 

NSFAS said the complaints would be investigated and “appropriate action will be taken”. Service providers would be instructed to increase their physical presence at universities so they could respond to queries.  

The Organisation Undoing Tax Abuse (Outa), which has been investigating NSFAS since 2022, claimed in February that students on the financial aid scheme could pay higher bank fees than students with commercial bank accounts, such as R29 for a monthly bundle fee for which other banks charged R10.

See Outa’s breakdown of the NSFAS account costs versus other banks’ costs here.

Outa also claimed that of NSFAS’s four service providers, only one had a banking licence, while only two out of the four were registered VAT vendors. 

University students and student organisations have warned they will take to the streets if the issues are not solved.   

The Democratic Alliance spokesperson on higher education, Chantel King, said the party had written to Higher Education Minister Dr Blade Nzimande and to the Banking Association of South Africa (Basa) over the direct payment system. 

“We hope Basa can give clarity on the cost structure from well-established banks and whether Coinvest Africa, Tenet Technology, Ezaga Holdings and Norraco Corporation are accredited financial service providers,” she said. The party also wanted Nzimande to respond to the findings of Outa’s investigative report. DM


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