Government should hand Nsfas over to universities, says independent body

As the National Student Financial Aid Scheme (Nsfas) faces a mountain of issues, the Independent Institute of Education (IIE) wants universities to take over the fund.

Nsfas has faced a lot of criticism for maladministration, failure to pay students on time, providing accommodations, and the recent dissolution of its board, amongst others.

The board was dissolved by the Minister of Higher Education, Science and Technology Blade Nzimande, earlier this month following allegations of maladministration.

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‘Corruption within NSFAS is so endemic’

Reacting, IIE managing director Dr Linda Meyer told The Citizen that widespread reforms are needed at the fund.

“The Department of Higher Education and Training (DHET) already disburses billions of rands in university grants directly to universities. There is therefore no reason why the funds that NSFAS received from DHET, cannot be paid by universities and TVETs for disbursement to students,” said Meyers.

She said the system worked with minor challenges when universities paid the money directly to their students, and so it should revert back to its former state.

Meyer said corruption within the scheme is endemic, and minor changes to its leadership and systems are futile.

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“The fact is that the corruption within NSFAS is so endemic and structural that changes to the board will accomplish nothing. The issues are deeply embedded in the organisation’s procedures, culture, and perhaps even its informal norms and practices,” Meyer added.

According to Meyer, Nsfas is an unnecessary middleman that should be completely disbanded. The IIE director said all the scheme does is apply a band-aid to its crises instead of fixing the problem.

“The Nsfas transformation requires more than cosmetic changes. It demands a commitment to transparency, a willingness to confront corruption head-on, and the establishment of robust systems,” she said.

Nsfas reforms

When asked what reforms she would make if given the power to do so, Meyer outlined the following six amendments aimed at addressing Nsfas’ current issues:

Comprehensive Audit and Evaluation

• Conduct a Forensic Audit: Initiate a comprehensive forensic audit to thoroughly investigate the financial management, allocation processes, and administrative activities of NSFAS. This audit would pinpoint sources of mismanagement or corruption and provide a clear basis for corrective actions.
• Identify and take appropriate legal action against staff members, board members and service providers that may be implicated.

Structural Reforms

• Decentralise the Funding Mechanism: Shift the responsibility for student financial aid from NSFAS to individual higher education institutions. This could potentially reduce layers of bureaucracy, improving efficiency and accountability by placing the management of funds closer to the beneficiaries.
• Legislative Changes: Propose and advocate for legislative amendments that would redefine the operational framework of student financial aid in South Africa. These changes would aim to enhance oversight, transparency, and the equitable distribution of funds.

ALSO READ: Nsfas needs a complete overhaul

Strengthening Oversight and Accountability

• Establish an independent oversight body: Create an independent body charged with overseeing the operations and finances of NSFAS (or its successor structure). This body would also be responsible for ensuring compliance with transparency and accountability standards.
• Implement performance-based management: Link the remuneration and continuation of NSFAS executives and senior managers to performance metrics, including efficiency, transparency, and integrity.

Transparency and Engagement

• Enhance Transparency Measures: Develop and implement a public reporting system for NSFAS activities, including detailed breakdowns of fund disbursements and outcomes. Ensure these reports are easily accessible to foster public trust and accountability.
• Stakeholder Engagement Forums: Regularly engage with stakeholders, including students, educational institutions, and civil society, to gather feedback and suggestions for improving the system. These forums would also serve as a platform for NSFAS to report back to the public on progress and challenges.

Addressing past injustices

• Remedial programmes for affected students: Introduce programmes specifically designed to assist students who have been adversely affected by past imbalances or wrongdoings in NSFAS. This might include financial compensation, expedited or additional funding support, and other educational resources.

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Innovation and improvement

• Technology Integration: Leverage advanced technologies to improve the application, distribution, and monitoring processes. For example, using blockchain technology to ensure the integrity and transparency of transactions.

Meyers said these reforms would “focus on creating a transparent, accountable, and efficient system that prioritises the needs and rights of students, ensuring that higher education is accessible to all based on merit and need, not financial capability alone”.

Student debt

Student debt is a burden that has long been weighing on millions of South African graduates. Meyers called on the government to settle students’ debts to universities on behalf of them.

The burden of Nsfas paying for everything is the cause of the gradually increasing student debt. The independent director said Nsfas should continue to be free; however, it must only pay for tuition and books.

“Additional allowances should be optional in the form of an interest-free bursary that students should pay back to the government after they secure employment and start earning a minimum threshold.

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The repayment amount should be a manageable as a percentage of earnings recovered by SARS. This will allow the scheme to be sustainable,” Meyers suggested.

Furthermore, she said under this system NSFAS beneficiaries should be given the option to choose whether they want to study at a public or private institution.

The Citizen reached to Nsfas for comment. Response from the scheme will be included once received.