NSFAS to stop cellphone-enabled payments
SA’s agency for funding higher education students will stop disbursing allowances via mobile phone technology from the beginning of 2020, as part of its efforts to combat fraud.
The National Student Financial Aid Scheme (NSFAS), which is under administration, is the government’s conduit for providing financial support for students from poor and workingclass families studying at universities and technical and vocational education training (TVET) colleges. In 2019 it received grant funding of R16.4bn and approved loans and bursaries to more than 442,000 students.
The NSFAS introduced a cellphone-enabled payment system for allowances for students at some TVET colleges in 2013 to try to counter their administrative weakness and gradually expanded the system to 26 of the sector’s 50 institutions. It pays the rest of SA’s student allowances via the university or TVET college at which they are studying.
The NSFAS wallet, previously branded sBux, has proven vulnerable to identity theft and creates opportunities to defraud students, said higher education, science and technology minister Blade Nzimande in a written response to questions in parliament last week.
The NSFAS has blocked the accounts of students who have had one or more mobile number changes, and these students will have to be verified at their institutions before they receive their next payments, he said.
NSFAS administrator Randall Carolissen said on Sunday the cellphone-enabled payment system had allowed syndicates to collude with NSFAS staff to defraud students, and “numerous” cases had been opened with the police.
A “small but significant” amount of money had been lost to fraud in this manner, he said.
Three NSFAS employees were arrested in Cape Town in October for allegedly diverting student allowances into their own bank accounts.
More arrests are expected, said Carolissen.
The NSFAS plans to phase out all intermediaries involved in disbursing student allowances and ultimately wants to ensure all students are paid directly into their banks accounts. It had disbursed funds to about 717,000 students in 2019, he said.
The SA Further Education and Training Student Association, which advocates for TVET college students, welcomed the NSFAS’s move, saying it would protect students from fraud. Students would be expected to provide their banking details when they applied for funding, it said.