NSFAS To Be Investigated by Public Protector
Editor: Mulamuleli Tshitangano
NSFAS recently introduced their direct payment system for the distribution of student allowances. Since then, student’s have noticed fraudulent withdrawals from their accounts.
It turns out that the companies contracted to distribute the student allowances are not permitted to do so, because they are not Financial Service Providers! However, they’ve been earning R4 million per month from this NSFAS deal.
The NSFAS CEO has since been suspended because of this petition.
The National Student Financial Aid Scheme (NSFAS) or rather National Student Failing Aid Scheme has recently introduced their new so-called "direct" payment system for the distribution of student allowances. The Minister of Higher Education Dr. Blade Nzimande last year announced this new payment method, suggesting that it would be a more student-centered approach and one that would be more safe and secure to use.
The experience of students however shows otherwise, with many students suspecting fraudulent withdrawals from their accounts. NSFAS is investigating this matter after it was brought to their attention.
What is more worrying is the fact that the companies appointed by NSFAS does not have the necessary paperwork such as banking licenses to operate as Financial Service Providers. In an investigate report by the Organisation Undoing Tax Abuse (OUTA) it was found that none the companies are registered at the Financial Sector Conduct Authority (FSCA).
Note that the Office of the Public Protector is investigating this matter after the SRC lodged an official complaint against NSFAS.
These are all serious concerns we as students have with this direct payment scheme and we question who is benefiting from this new method. It is however quite clear that it is not the most poor and vulnerable that NSFAS ought to serve benefiting but the companies appointed.
The Sunday Times reported on weekend that the companies will make millions of rand from the deal. According to calculations — based on the 360,771 university students who have so far been “on-boarded” to the new payment system — the four will score R4.3m a month through the R12 banking fee deduction.
- Stellenbosch University SRC 2022/2023
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