Statement by the Minister of Higher Education, Science And Innovation, Dr Blade Nzimande on the occasion of the National Student Financial Aid Scheme (NSFAS) developments in the processing of student allowances
Programme Director Mr Ishmael Mnisi
Deputy Minister, Mr Buti Manamela;
Director-General of the Department of Higher Education and Training, Dr Nkosinathi Sishi;
Board Chair of NSFAS, Mr Ernest Khosa, and the Acting CEO Mr Masile Ramorwesi;
All officials present;
Members of the media.
I have called this media briefing today to provide the NSFAS beneficiaries, our institutions and the public at large with an update about the work underway at the National Student Financial Aid Scheme (NSFAS) to ensure that all the qualifying beneficiaries receive their allowances as per the funding guidelines.
Let me take this opportunity to welcome the NSFAS Acting Chief Executive Officer Mr Masile Ramorwesi who is joining us for the first time in our media briefing in the capacity as Acting CEO.
I wish to remind all South Africans about the mandate of NSFAS. NSFAS was established by our Government in 1999 to provide financial assistance to deserving beneficiaries who qualify for tertiary education.
As a scheme, NSFAS truly represents one of the most progressive efforts by the government to systematically break the legacies of inter-generational social inequality in access to and outcomes of, post school education and training.
This is particularly important if we consider the structural and social legacies imposed over centuries of colonial and apartheid rule.
There is no doubt that this government has made a decisive break in these reproductive legacies of the past.
Since 1991, NSFAS funding has grown from disbursing R21.4 million to almost R50 billon to fund children of the working class and the poor seeking to further their studies in public universities and TVET colleges.
This is a clear indication that government has prioritised a massive increase in student funding to radically broaden access to those sections of our communities who had no access to post school education and training.
The other notable milestone for the scheme has been the integration of all public universities and TVET colleges to a new student-centred model wherein students apply directly to NSFAS for funding.
This transition required a significant increase in NSFAS resources and involved major changes to the systems and the processes of NSFAS to handle large number of student applications.
I must indicate that the resources that NSFAS so required, is provided by this government.
I must upfront indicate that NSFAS – insofar as it successfully services the needs to the vast majority of poor students - is not in a crisis as many of our government detractors would want the public to believe.
Actually, we have turned the tide in student funding for the children of the poor and the working class and NSFAS is the biggest single largest student funding agency in Africa and a unique scheme in the world in that it completely funds students for their study, travel, accommodation and personal care.
During the 2023 academic year, we are funding all qualifying students on the DHET bursary scheme who have been admitted for funded programmes at public TVET colleges and universities.
A total of 1 131 419 applications have been received through the scheme’s online application portal and 156 700 of these applications are from SASSA beneficiaries.
At the beginning of the year, we have also ensured that NSFAS provides for an upfront payments to institutions to cover for cost related to registration, tuition fees and living allowances to ensure that all NSFAS beneficiaries were registered in all our institutions without paying an upfront registration fee.
We have also ensured that we implement an inflated linked increase of 5% on all allowances and we also implemented a 10% increase on the living allowance.
Dealing with challenges confronting the scheme
As of 13 January 2023, NSFAS deployed its staff members to institutions across the country to assist with funding related issues, data exchange processes with institutions to ensure seamless data integration and the registration of students onto new NSFAS direct payment systems.
At that time, I also directed NSFAS to drastically improve its communications systems and urgently build capacity for prompt responses to all NSFAS enquiries, with a clear directive that Not a single NSFAS query must be left un-responded to, and timeously.
I also issued a warning to all those students who are improperly benefitting from NSFAS and urged appropriate criminal and legal action against anyone found of defrauding the system.
I indicated that such students face the possibilities also to be declared illegible and actually removed from those funded, and criminally charged. I will come back to this matter later.
On Student-Centred Model and NSFAS Student Accommodation Portal
For the past two years, NSFAS has made strides in its implementation of the Student-Centred Model and two of the main initiatives aimed at this, is the implementation of the NSFAS Direct payment solution, better known as the NSFAS Bank Account, and the development of the NSFAS Student Accommodation Portal.
This model is centred around an approach that places the needs of students at the heart of the scheme’s operations but also streamlining all processes that affect the disbursement of funds for tuition, transport, food and accommodation.
To date, a total of 509 220 claims received from university students totalling R40 billion. Already this is above the allocation for the running of the universities.
We have already paid to 491 457 students an amount of R29,6 billion. There are 23 389 students with exceptions that we are currently funding. These exceptions occur when NSFAS cannot confirm the funding pathway or funding rules are not complied with as per submitted registration records. The biggest exceptions relate to institutions claiming incorrectly, by including meals yet they are catered by institution. This means it is double deeping, which must be attended to.
NSFAS to date received 250 548 claims from TVET college students to the value of R6,8 billion. NSFAS paid 209 352 students at R4,8 billion. The difference is of 10 374 students which will be paid after the previous disbursement.
I therefore once more would like to urge all our beneficiaries who have not been onboarded (registered) or converted onto the new payment system to urgently do so in order to enable NSFAS to pay their allowances without any further delay.
In order to illustrate progress in the onboarding of our students, I will now provide a breakdown by student percentages (%) per our universities that have been onboarded.
Universities onboarded 90% to 99%
- Cape Peninsula University of Technology (96%)
- Central University of Technology (92%)
- Durban University of Technology (96%)
- Mangosuthu University of Technology (95%)
- Nelson Mandela University (97%)
- Tshwane University of Technology (99%)
- University of the Free State (93%)
- University of Johannesburg (94%)
- University of KwaZulu Natal (97%)
- University of Limpopo (95%)
- University of Mpumalanga (97%)
- University of Pretoria (96%)
- Sefako Makgatho Health Science University (96%)
- Sol Plaatje University (96%)
- University of Stellenbosch (90%)
- University of the Western Cape (90%)
- University of Venda (99%)
- University of Cape Town (93%)
- Rhodes University (96%)
- University of Zululand (95%)
- Vaal University of Technology ( 91%)
- Walter Sisulu University (97%)
- Universities onboarded 80% to 90%
- North West University (84%)
- University of the Witwatersrand (88%)
The above statistics clearly demonstrates my previous point that NSFAS – insofar as it services the needs of the vast majority of eligible students across the system – is not in crisis.
The University of South Africa (UNISA) stands at 67% and the University of Fort Hare stands at (56%).
The NSFAS institutional support teams will extensively focus their attention in all those institutions whose percentages are low, so they improve on their onboarding processes.
The team will continue holding bi-weekly meetings with the institutions finance offices and the direct payment partners, so that institutions have a platform to raise the challenges and areas of clarity, where both NSFAS and the partners are present.
In relations to our TVET Colleges, the process of onboarding continues as they have multiple academic terms.
Appointment of direct payment service providers and Bank charges
I am currently awaiting for the final report on the NSFAS investigations into the process of the appointment of the four (4) Direct Payments Program partners following public allegations on the process of their appointment.
As a result of these allegations and the alleged involvement of the NSFAS CEO, Mr Andile Nongogo, I have noted the decision by the Board to place him on leave of absence, whilst investigations by an independent legal firm are ongoing on these allegations.
In relation to bank charges to student accounts, I have been briefed that NSFAS negotiated for a R12 monthly bank charge, which excludes money transfer costs to other banks.
I have directed that NSFAS relooks at the entire bank charges regime to find possible measures to further reduce these costs for our beneficiaries. I will await the Board final determination in this regard.
I have been assured by NSFAS Board that reports that NSFAS disbursed incorrect amounts to beneficiaries are misleading and untrue. However, should it happen that such instances may have occurred, I urge the affected students to immediately report these to NSFAS.
Collaboration with other government agencies, identification of unqualifying students and the appeals process
I must also indicate that NSFAS will continue its collaborative work with other government entities such as the South African Social Security Agency (SASSA) South African Revenue Services (SARS) and the Department of Home affairs to verify all NSFAS applications for funding to ensure the correct processing of students applications.
According to the report from the Board, the were 45,927 records that shows the disqualification of students are due to processing gaps, which fall under three (3) broad categories namely.
- Hybrid applications
- Missing parental relationships
- Latency data from HEMIS
I want to spend some time to explain these areas so that everyone understands it because they seem to be a point of concern to students who were correctly or erroneously disqualified.
Hybrid Applications are continuing students who applied. About 14 703 records where continuing students who applied erroneously because of migrating from the old to the new system. In some instances, it was students panicking because they did not see their funding status and applied for funding. I can confirm that all these students are now funded.
The balance of 31 224 students remains not funded and this is due to the assessment of Financial eligibility as NSFAS continues to pick up additional parental relationships and academic ineligibility.
In relation to Missing Parental Relationships, these are first time entering students who were previously funded and later rejected because of additional parental relationships that were verified based on additional information sourced from government agencies, such as the Department of Home Affairs (DHA) and the South Africa Revenue Services (SARS).
Initially some student declared one parent or wrong parent which was not picked up by the Department of Home Affairs (DHA), as such, a decision was made to initially fund the student.
However, based on review of this trend, through a relationship matrix that is built internally at NSFAS, we established additional parental relationship of students.
This was exposed to SARS verification and SARS came with the feedback that the combined family income of these families exceeds the threshold. This lead to the discontinuation of funding of some of the students.
Another criterion is the Academic Eligibility review, which was incomplete due to the delays in data received from HEMIS. This impacted the N+Rule.
As a results of these disqualifications, NSFAS received a total of 178 426 appeals whose outcomes are spelt out below:
- 63 331 of those appeals were approved and 8528 appeals were rejected.
- Out of these 178 426 appeals received, 30 712 were invalid appeals, meaning students either withdrew, or their appeals were duplicated.
- Then there are 41 438 appeals that required the submission of external dependencies, such as submission of documentation. About 20 908 are awaiting supporting document appeals, meaning the student submitted incorrect documents at time of appeal and were requested to provide further documents.
- In addition, 20 530 students through results from my Department of Higher Education and Training and (DHET) and our institutions indicate that the students did not progress. Students appealed the decision and indicated that they have passed.
The process then dictates that NSFAS verify the information with the institution and there is a time lag on the processing with institution. Currently there are 11 284 appeals in evaluation which are assigned to a case worker to process each appeal. All these appeals will be attended to urgently.
Directives to the NSFAS Board
I have had a meeting with the Board which gave me an initial report about these challenges.
Based on the report, I have once more directed Board to ensure the efficiency and effectiveness implementation of the solutions provided by the Board.
I have therefore directed the NSFAS Board to immediately do the following:
- Implement their redesign Information Communication Information (ICT) system, which leverage modern technologies and capabilities in order to deliver the NSFAS mandate seamlessly;
- Review all their processes, operations and their allowances disbursement model;
- Review their overall governance and management design to ensure the full execution of their mandate;
- Implement a new performance management and accountability framework in a bid to establish a high-performance culture within the organization;
- Improve their stakeholder, media and communication relations;
- Implement a 24-hour call centre;
- Initiate criminal and legal action against all students who have been defrauding NSFAS.
To strengthen the NSFAS Board, I have taken a decision to replace two Board members who have since resigned and appointed two additional members to the Board. Their names are:
- Prof Laurens van Staden, who has a wealth of experience in the higher education sector and has over the past four decades demonstrated his commitment to serving the poor and working class citizens of the country through his work.
Prof Van Staden studied at numerous universities and he examined over 30 Master and Doctoral degree candidates for a number of universities locally and abroad, published over 40 peer reviewed articles and technical reports and presented over 30 papers nationally and abroad.
- Prof. Ntombizozuko Dyani-Mhango who has over 16 years of experience teaching, conducting research and supervising in the areas of constitutional law, public international law and international criminal law. In addition, she also served as a clerk at the South African Constitutional Court, was admitted as an Advocate of the High Court of South Africa, and is rated as an established researcher by South Africa’s National Research Foundation.
- Mr Lucian Kearns, who is the current Acting Chief Financial Officer at the Department of Higher Education and Training. He will be bringing a wealth of experience gained in the public sector financial management. Mr Kearns serves in several structures within government that deals with finance.
- I will be finalising the appointment of a representative from Treasury, who will be part of the Board.
Allowances paid by NSFAS
Before I conclude my statement, I would like to remind the public that NSFAS is paying the following allowances for all our qualifying students for the 2023 academic year:
University students’ allowances
- University managed and catered students receive a R5,460 learning materials allowance.
- The accommodation allowance is capped at R45,000. This are instances where the universities provide accommodation and catering.
- University managed self-catering students receive a learning materials allowance to the value of R5,460, totaling to R16,500 per annum living allowance and accommodation allowance which is capped at R45,000. Our living allowance has increased across the board to the value of R1650 per month, which is 10% increment as compared to the 2022 figure.
- Living with relatives (not in private accommodation) students received a learning materials allowance of R5,460, and accumulating to R16,500 per annum living allowance.
- Private off campus accredited accommodation students are receiving a learning materials allowance of R5,460, accumulating to R16,500 per annum living allowance and with their accommodation allowance capped at R45,000.
TVET students allowances
- TVET College own catered residence receive an accommodation allowance to the value of R54,045 per annum
- TVET College managed own and leased self-catered accommodation for the first time receive a living allowance of R6000, personal care allowance of R3,045 and a Maximum R45,000 plus living allowance paid to TVET Colleges.
- TVET students in private accommodation receive a R6000 living allowance, R3,045 personal care allowance and R45,000 per annum accommodation allowance.
- TVET students residing less than 10 km from the College (this means from 0 km and beyond but up to 9.9 km), receive a R6000 living allowance, R3,045 personal care allowance and R7,718 travel allowance.
All these allowances are in line with the 2023 NSFAS Eligibility criteria and conditions for financial aid already published and shared with institutions.
The figures provided above illustrate just how important the financial aid provisions from the State distributed through NSFAS is at currently and how this funding has grown over the years.
In conclusion, it remains our commitment as an ANC government to transform our post-school education system and ensuring that no student is excluded from access government funding directed at the students who come from the families of the working class and the poor.
It is not an option for our post-school education and training system to remain the preserve of only those who can afford to pay.
This is amongst the reasons that we are now finalizing the work on our Comprehensive Student Funding Model, which will be announced after approval by Cabinet.
This brings me to the end of my statement.