- Action SA, the political party of Herman Mashaba, is looking to take NSFAS to high court over the rollout of its new student bank accounts.
- The bank accounts have been controversial since their launch with students and other entities alleging that they do more harm than good.
- Action SA alleges that the entire project is fraudulent and students will have to pay for it via high banking fees.
While the National Student Financial Aid Scheme (NSFAS) tries to assuage its student beneficiaries that the rollout of its new direct payment bank accounts was performed in their best interest, others have called it another way to steal money.
Politician Herman Mashaba, through his party Action SA, has made it clear that the party will take NSFAS to court over allegations that the rollout of the new bank accounts was botched, primarily due to licensing inexperienced and unregulated fintech companies to aid in its implementation.
A relatively new party, the politically moderate Action SA made notable gains during the 2021 municipal elections, becoming the fourth most popular party in Gauteng, after only being established a year prior.
According to The Sowetan, Action SA said it will approach the high court not only to call the decision to implement the new bank accounts “irrational” but to have the court scrap the entire project and attached contracts. Since its official launch on 1st July, students funded by NSFAS have had to use the new bank accounts exclusively to access their funding.
Since then, some student representative groups and entities like OUTA have begrudged the project. Citing problems like alleged poor education during the rollout, as well as high banking fees associated with the new accounts.
“Our firm belief is that NSFAS’ rushed and questionable shift towards the Direct Payment Allowance System directly harms the well-being of students and will result in the reckless squandering of taxpayer funds,” says Action SA via a spokesperson.
“We are committed to ensuring that the burden of this dubious contract does not fall on the shoulders of student beneficiaries, who heavily rely on every cent to sustain themselves.”
Action SA says it will issue two challenges at the courts. The first allegation is that NSFAS’ bidding process surrounding the project is of a “blatant dubious nature” and the second is that students are now paying for this “fraud through excessive fee structures.”
NSFAS has spent the last six months working on the rollout of the student bank accounts, according to Saud Ally, CEO of eZaga who spoke to Hypertext in an interview. eZaga is one of four fintech firms to win bids to help NSFAS launch the bank accounts.
Others include Tenet Technologies, which is facing its own legal woes, as well as Coinvest and Narroco.
Ally told us that NSFAS and its partners have worked hard to decrease the fees associated with student bank accounts and that student beneficiaries were already paying fees associated with their funding prior to the rollout of the bank accounts.
We will have more coverage on eZaga’s involvement with NSFAS and the bank accounts.
[Image – Action SA]
