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Nsfas Students Cry Foul Over New Banking System

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Nsfas Students Cry Foul Over New Banking System

Nsfas Students Cry Foul Over New Banking System.The implementation of a new banking system for students funded by the National Student Financial Aid Scheme (NSFAS) in the middle of the academic year has sparked frustration within the university sector. Students have expressed concerns about the lack of communication regarding the new system, high banking service costs, and the decision to implement it during the academic year.

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Nsfas Students Cry Foul Over New Banking System

According to NSFAS, the new “Bank Account” system was introduced to accommodate the growing number of students receiving funding from the scheme. With over one million students being funded this year alone, the new system aims to ensure that students receive their allowances for food, transportation, and living expenses in a secure and efficient manner. Previously, NSFAS distributed funds to universities, which then distributed the money to NSFAS students.

While the NSFAS Bank Account was initially introduced in 2022 for students at Technical and Vocational Education and Training (TVET) colleges, it has recently been implemented for university students.

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Concerns have been raised by students, some reporting that their allowances have not been paid, and there is confusion about how the new system operates. Students seeking assistance at the NSFAS offices in Cape Town’s Foreshore have been advised to exercise patience, as staff members have provided limited information.

Masibulele Siqingatha, a first-year marketing student at the Cape Peninsula University of Technology (CPUT), shared his experience of previously receiving his allowance without issues until the new banking system came into effect. Now, Siqingatha finds himself under review for funding eligibility, which he finds puzzling as he had already been receiving NSFAS funding for half a year.

During his visit to the NSFAS office, Siqingatha was informed to await communication from Tenet Technology, one of the four companies involved in the new banking system. However, he has yet to receive a response or a timeframe for addressing his queries.

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Another CPUT student, Anesipho Moyake, initially had no issues with the new system but has not received her funds for July. She noted that the funds had not reflected in her Tenet bank account, leading her to suspect that something is amiss and expressing concerns that it might be a scam.

Unanswered Questions

Despite Daily Maverick sending questions to NSFAS regarding the new system within the given deadline, the organization had not provided a response. Queries directed to Higher Education, Science and Technology Minister Blade Nzimande were redirected to NSFAS.

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In response to the numerous queries on social media regarding NSFAS, Minister Nzimande took to his Twitter account on Wednesday afternoon. He stated that he had instructed NSFAS to address all the concerns raised by students and that they were working towards organizing a media engagement to discuss the issue in greater detail.

Outa Raises Concerns Over NSFAS Banking System

The Organisation Undoing Tax Abuse (Outa) has stepped in to raise questions about the new banking system implemented by NSFAS. In February, Outa expressed concerns that NSFAS had hired businesses without proper banking licenses or VAT registrations. Outa pointed out that out of the four businesses tasked with distributing student funds – Coinvest Africa, Tenet Technology, Norraco Corporation, and Ezaga Holdings – only Ezaga Holdings possessed a banking license, which was a compulsory bid requirement. Additionally, Outa revealed that two of the businesses, Norraco and Tenet, were registered as VAT vendors when they submitted their bids.

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Outa also highlighted that the new NSFAS Bank Account charged higher fees for transactions compared to student accounts offered by other commercial banks. For instance, the monthly bundle fee was set at R29, while other banks charged R10. Similarly, ATM withdrawals incurred a charge of R12 per R100, whereas other banks charged R7.50 per R1,000.

According to Outa’s calculations, the NSFAS Bank Account deal could be valued at around R1.5 billion over the next five years, a cost borne directly by students from their allowances as the charges are deducted from their bank accounts.

Student Organizations Voice Concerns

Student organizations have become involved in raising concerns about the new payment system. Lenard Malesa, the federal chairperson of the Democratic Alliance Student Organisation (Daso), criticized the monthly fees and transaction charges imposed on students, particularly considering the rising cost of living across the country. Malesa questioned the timing of the system’s introduction in the middle of the year, during the exam period, instead of at the beginning of the year.

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Daso expressed its rejection of the payment system and demanded a tangible and secure alternative from Minister Nzimande and NSFAS that would not exploit or confuse students. The organization also pledged to engage with DA MP Chantel King, a member of the parliamentary higher education oversight committee, to address the issue.

The Student Representative Council (SRC) of the University of Cape Town (UCT) released an email statement acknowledging the uncertainty, anxiety, and frustration surrounding the new direct payment system. The SRC rejected the system and called for UCT to continue administering student allowances. They criticized Coinvest, the banking business implemented at UCT, for its handling of allowances and labeled the withdrawal and transfer charges as unfounded and exorbitant. The UCT SRC called for Minister Nzimande’s resignation, stating that NSFAS and the Department of Higher Education had shown a lack of concern for students’ best interests.

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The Economic Freedom Fighters Student Command also wrote to Minister Nzimande, raising various concerns in the higher education sector, including the new banking system. They questioned the high banking costs, labeling them as illogical and unreasonably high. They highlighted how these fees restricted students’ ability to purchase basic necessities like bread, sanitary towels, and toiletries. The EFF Student Command further questioned the use of banking businesses lacking the necessary licenses. They warned that if their grievances continued to be ignored, they would take to the streets in protest.

Wits SRC Calls for Integration and Data Accuracy

The University of the Witwatersrand’s Student Representative Council (SRC) expressed its position that NSFAS and Tenet, the banking service provider intended for use at the university, were not prepared to initiate the new system. The SRC emphasized the need for a 20-month integration period to ensure a smooth transition and effective collaboration between NSFAS and the new banking officials at Wits before allowing the takeover of allowances.

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The primary concern raised by the SRC was not with Tenet itself, but with the accuracy and reliability of the allowance distribution data that NSFAS would send to Tenet. The SRC encouraged NSFAS to address any issues with the collection of registration data to ensure accuracy before transferring the responsibility of allowance distribution to Tenet.

Please note that Daily Maverick intern Jim Mohlala, a third-year CPUT journalism student, receives funding from NSFAS to support his studies.

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