Incompetence and corruption at the National Student Financial Aid Scheme (NSFAS) have brought the organisation to its knees, threatening the future of young South Africans trying to claw their way out of poverty through education.

The South African Students Congress (Sasco) and the South African Union of Students (SAUS) are angry after the latest revelations of rampant corruption, mismanagement and political interference at NSFAS. The student bodies say that if the situation is not thoroughly investigated by both NSFAS and government authorities, and acted upon expeditiously, they will launch protests.

Tens of thousands of students are waiting for outstanding payments from 2023, which NSFAS has promised to make by 15 January, and more than a million candidates have yet to hear of their status for 2024.

On Thursday, 4 January, civil rights group Outa released a shock report and damning recordings concerning NSFAS.

In the recordings, NSFAS chairperson Ernest Khosa is heard speaking to two service providers – an unnamed man and Thula Ntumba, husband of Tshegofatso Ntumba (a director of Coinvest, one of four companies appointed to make payments to students) – about kickbacks worth millions of rands that were allegedly paid to Education Minister Blade Nzimande and to Khosa.

The recordings also reveal payment of R1-million and donations of T-shirts and bags to the SACP; as well as a Werksmans Attorneys report on NSFAS corruption.

Nzimande, Khosa and the SACP have denied receiving money and donations from the parties involved.

Four suppliers – Coinvest Africa (Pty) Ltd, Tenet Technology (Pty) Ltd, eZaga Holdings (Pty) Ltd and Norraco Corporation (Pty) Ltd – were appointed in June 2022 to handle payments to students, which Outa says caused the NSFAS system to collapse.

At the time, Outa warned that awarding tenders to these service providers would cause nonpayment issues.

‘Kickbacks and protection money’

Outa has published several reports exposing how funds were being mismanaged and the role of former NSFAS CEO Andile Nongogo in alleged corruption.

Nzimande appointed Nongogo as CEO of NSFAS and Khosa as the chairperson of the NSFAS board. Nzimande served as the SACP’s general secretary for 24 years and is still associated with the party.

Kickbacks are believed to have been in return for tenders and protection for service providers, whom Khosa is heard promising to protect from “being killed” (having their contracts cancelled).

On Monday, 8 January, Nzimande held a press briefing in which he vowed to take legal action against Outa for spreading “nefarious lies” and he vowed to mount a “fightback” campaign.

Read more in Daily Maverick: Nzimande vows to sue Outa for spreading ‘nefarious’ lies

Before the press conference, NSFAS’s Ishmael Mnisi – former spokesperson for the Higher Education Department – told Newzroom Afrika that Khosa admitted to attending the meetings and that it was his voice in the recordings, but claimed the audio had been manipulated. “Mr Khosa has listened to those recordings and I can tell you there was manipulation of those.”

In one of the recordings, Khosa is heard saying he needed to catch a flight to meet Nongogo to discuss stepping aside. Nongogo was dismissed shortly afterwards.

On Tuesday, the Labour Court dismissed Nongogo’s bid for reinstatement.

Khosa took a month’s leave on Thursday, after a special meeting of the NSFAS board to discuss the scheme’s state of readiness for the 2024 academic year.

The leave of absence, NSFAS said, would enable the board to deal with allegations against him.

“The chairperson reiterated to the board that he had never received any financial gratification for his personal use or facilitated any for the Minister of Higher Education… or the SACP.

“The board chairperson also raised concerns about threats that have been made against his life and that of his family.”

The board resolved to appoint an independent legal firm to look into the matter.

It said it was hunting for a new CEO and the 2024 application process was proceeding “extremely well, with applications having reached the 900,000 mark”.

NSFAS claims only 20,000 students have not been fully integrated into the system.

But SAUS spokesperson Asive Dlanjwa said: “As far as the last numbers they gave us, in November last year, 10% of students have not been able to get onto the new payment platform to be able to receive the allowances now. NSFAS has 1.1 million students so 10% is almost 110,000 students that they confirmed they have not fully onboarded onto the payment system.”

Last payments in April 2023

These are certified beneficiaries of NSFAS, who received their last payments from the scheme in April last year, he said.

In November, though, NSFAS denied this was the case: “[NSFAS] is currently funding 1.3 million students for the 2023 academic year following an unprecedented surge in the number of applications received. The entity has been working tirelessly to ensure that it improves on its processes for applications and ensuring quick turnaround times on funding decisions.”

In October, however, its own statement revealed it was only able to fund a fraction of the students: “In relation to the allowances, disbursements for the month of October, NSFAS successfully disbursed allowances to 143,423 beneficiaries at TVET colleges, with a total amount of R681,051,078.”

It said total tuition disbursements to all universities amounted to R1,602,289,873.

Read more in Daily Maverick: Nzimande lashes out at detractors amid NSFAS funding uproar

“NSFAS is currently engaged in the process of doing mop-up payments for universities where there were exceptions. Furthermore, the claim by SAUS that there are 70,000 students who have not been paid is unfounded and untrue.”

Last year, NSFAS approved funding for 91,491 students, out of 1,666,039 applications received.

A warning

Sasco president Vezinhlanhla Simelane welcomed Khosa’s leave of absence and called for an urgent investigation.

Sasco was not yet calling for Nzimande to be axed, but if he was found to have done wrong it would do so.

Simelane said that, with TVET colleges opening and university registrations about to open, if payments weren’t made by 15 January there would be a crisis.

Sasco is threatening to take to the streets. “This needs to come to an end… If they don’t pay we will pay a ‘revolutionary visit’ to their offices,” said Simelane.

Outa investigations manager Rudie Heyneke said third parties were ill-equipped to handle NSFAS payments. “We’ve said [that] if the public service can pay their almost a million employees every month on time and without any problems, why doesn’t NSFAS go to the public service and take that model, instead of appointing third parties to do this at a high cost?” DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R29.