NSFAS cancels ‘undeserving ’ beneficiaries after R5bn loss

The NSFAS has cut out thousands of students which it believes were dishonest in their applications for funding.

The fund says for the first time in its history it is now verifying information from application with public database including Sars, home affairs department, SA Social Security Agency (Sassa) and credit bureau.

This after it found out earlier this year that it lost R5bn funding by about 40,000 undeserving applicants between 2018 and 2021. Those funds have not been recovered. 

Many students have since taken to social media to complain about being “defunded” by NSFAS. 

Spokesperson Slumezi Skosana said it had already verified all 1.1m files belonging to their current beneficiaries and that those who tricked the system were sent letters about the decision to defund them. He did not want to disclose how many students have been defunded. 

“Acting upon the findings of the auditor general, our internal compliance processes and the observations of the Special Investigation Unit (SIU), NSFAS has initiated a remedial process where a student who is found to have been funded based on incorrect information is defunded instantly,” said Skosana.

“This is done to avoid wrongful and illegal allocation of funds to students who fall outside the prescription of our policies. Prescriptions of our policies and the law will be implemented firmly and vigorously to avoid among others a repeat of the more than R5bn that was allocated incorrectly to students since 2016.”

He said the new verification process is going to be a norm going forward and will replace the reliance on police affidavits which are sometimes doctored or falsified. 

He said they, however, had received complaints that some students were defunded incorrectly.

“If such cases are true, this is regrettable. A process of verifying these complaints will be immediately initiated and if proven otherwise, remedial action will be taken.”

He said they had not opened criminal charges against any students so far and that they would refer some cases to the SIU should the need arise. 

“We don’t have the number for now but in terms of wilfully misled, there are some categories that we’ve identified that in some instances it’s students who obtain information from grandparents or uncles who don’t get enough money and in some instances [university staff] have some role to play because they are the ones who submit list to NSFAS... 

“The investigation is ongoing, we’ve identified some of them where we’re obtaining application forms to see who signed and who completed the application forms so we can see who misled and we can see liability,” the investigator said. 

The SA Student Congress (Sasco) president Vezinhlanhla Simelane accused NSFAS of using a blanket approach.

“The defunding and the remedial processes that were done by NSFAS were done with a blanket approach without properly looking at the cases one by one, individually. NSFAS should have looked at the cases individually without defunding the students only basing it on what the system says,” he said. 

Simelane said most of the students were defunded wrongfully on the basis that some students don’t have reliable parents.

“There is a particular student who is an orphan and because of this investigation they have been cut off from funding because their identification has been linked to their parents and now they have been defunded but that is wrong as this student has proof that he grew up in an orphanage, has all the documents of a social worker to prove it but is now being prohibited from his studies and that is why we say they need to do their investigation properly and not rely on the system only,” said Simelane.

Tshwane University of Technology's Garankuwa campus student representative council spokesperson Kamohelo Sephuhle said: “They (NSFAS) didn’t explain to us what process they took and don’t tell us how it came to be this way. If they communicated with us properly, we would understand but at the same time not everyone who was defunded was rightfully defunded, there are some who really need the money."

Acting Cosatu spokesperson Mathew Parks welcomed NSFAS’s move, saying this would go a long way in preventing the scheme from running out of funds.

“NSFAS is running short of funds and when this happens this puts parents and student [who qualify for funding] in a difficult position,” he said.

Parks, however, warned NSFAS not to defund qualifying students.