- A Change.org petition has been launched by the leadership of Stellenbosch SRC calling for government to scrap the new NSFAS direct payment system.
- The students say the petition, alongside a set of demands, will be taken to Parliament today.
- Fresh investigations from OUTA allege that the four banking partners of NSFAS will make around R700 million per year on direct payments.
The NSFAS direct student payments saga continues this week, as the government-funded scheme is now dealing with a Change.org petition launched by members of the Stellenbosch University Student Representative Council (SRC).
Titled “Nzimande must scrap NSFAS ‘direct’ payment scheme,” the petition has more than 1 400 signatures after being started on 10th August 2023, and looks to be picking up steam with nearly 600 new signees in the last 24 hours.
While Change.org petitions generally don’t actually lead to any real change and are more of a way to generate publicity on an issue, the individual who launched the petition, William Sezoe, says that the SRC will be bringing it before parliament today – 16th August.
Sezoe has been highly vocal about the NSFAS direct payment system since it launched in July on social media and has been among the loudest detractors of the scheme. The launch of the petition follows more than a month of outcry against the scheme and enormous heaps of bad publicity against NSFAS.
“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,” reads the petition from the Stellenbosch SRC.
“The experience of students however shows otherwise, with many students suspecting fraudulent withdrawals from their accounts,” they said, adding that “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.”
Hypertext has been covering the NSFAS direct payment system since it launched, and even before that.
The payment system was initially spun up around seven months ago when NSFAS sent out a tender looking for fintech partners to help it devise a system where it could pay its nearly 1 million student beneficiaries directly without needing intermediaries like universities or banks.
The scheme explained that this new system was intended to limit fraud across the billions of Rands it pays to students every year. The new system, set to pay hundreds of thousands of students their living stipends and school fees, began rolling out during the holidays in July and when those students returned, many were left bewildered and confused.
Others were more outspoken, and many student councils outright called for the rejection of the system. Some levied allegations against NSFAS’ banking partners, that they were unlicensed, or that their technical systems were not working as intended, or that payments were not being made on time.
In response, NSFAS has continued to defend itself and its fintech partners and recently claimed that it would be seeking the help of law enforcement to deal with what it calls a “smear campaign” against itself and direct payments.
The CEO of eZaga, one of the four fintech partners, Saud Ally told Hypertext at the end of July that the four fintech partners have licenses under Access Bank and Nedbank, which allow them to “offer solutions and banking services to customers.”
A new Sunday Times report, however, cites fresh investigations performed by the Organisation Undoing Tax Abuse (OUTA) which found that Access Bank is not listed as an official bank with whom state institutions can transact.
It also alleges that together the four fintech firms will accrue approximately R705.6 million per annum for operating the new direct payment system. This money will be paid by student beneficiaries. OUTA believes that in total R3 billion will be paid from students to the four companies.
The money that NSFAS pays student beneficiaries is granted by the government and is ostensibly taxpayer funds.
“This is unacceptable and we request all NSFAS students to sign this petition to show their disappointment and disapproval with this new system,” reads the petition.
“This petition will be handed over on 16 August 2023 at Parliament together with a memorandum of demands, which includes a request for a commission of inquiry into NSFAS to Minister Nzimande and the Portfolio Committee of Higher Education,” it concludes.
Alongside demands made by students, the Public Protector has also caught wind of the ongoing saga with NSFAS and direct payments. It has also launched a case against the scheme. NSFAS recently said it had dispersed R992 million to students at universities and TVET colleges through the system.
