NSFAS ditches its bank accounts and cards after a year of failure

  • NSFAS is now telling its beneficiaries to abandon the branded bank accounts and cards it launched last year.
  • The cards are part of the now-doomed direct payment system that led the scheme into controversy and the dissolution of the board of directors.
  • NSFAS says that it has devised a new payment mechanism but has yet to explain what it is, only that it involves the scheme’s “internal banker.”

This same month last year, the National Student Financial Aid Scheme (NSFAS) told its student beneficiaries that they must use the newly launched student bank accounts and black NSFAS-branded bank cards as they would be receiving their allowances directly from the scheme.

Fast-forward 369 days and now the embattled institution is rolling back this decision, and is telling beneficiaries not to use the bank cards any more as NSFAS is now issuing allowances through its so-called “internal banker.”

Meanwhile, and specifically for beneficiaries attending TVET colleges, NSFAS has said that they will receive their allowances directly to their normal bank accounts. Students who did not previously have a bank account, with a commercial bank like FNB, Capitec, Standard Bank, etc., will have to open one to receive their allowances.

While NSFAS has been casual with its communications towards the “fam” ie. the scheme’s million-plus beneficiaries struggling with its poor decisions, including the rolling back of its bank accounts and cards, it is important that we remember that the scheme spent most of 2023 mired in controversy over a series of now-doomed decisions to launch the direct payment system.

The Organisation Undoing Tax Abuse (OUTA) calculated that the system would cost R1.5 billion over five years. “This is the estimated cost just to provide students with access to a NSFAS bank card, which students will have to pay directly out of their allowances, as the costs are deducted from their bank accounts,” it explained.

With NSFAS now ditching the system a year after launching, it is likely that a significant portion of the money spent on the system is now simply wasted. The scheme has been scrambling to find a system to accurately pay its students for the remainder of the academic year. It now says it has “devised a payment mechanism to address the ongoing allowance payment challenges through its internal banker.”

The scheme has yet to explain what this new mechanism is, but it follows the dissolution of the board of directors and the appointment of a government-sponsored administrator in the guise of former accountant-general of the National Treasury Freeman Nomvalo.


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