Probe could open can of worms
The possibility of fraud emerging within the National Student Financial Aid Scheme (NSFAS) is compounding problems of maladministration, which the fund hopes to solve with a new chairman and a forensic probe.
Sizwe Nxasana, who was appointed NSFAS chairman in August, says the 2015 budget for the scheme is R9,5bn and it assists about 420 000 students.
Of this, R4,94bn is for university study loans, R2,2bn for technical and vocational training college bursaries and R149m for administration. The budget is up from last year, when it was R9bn and funded about 414 000 students. In 2013 it stood at R8,7bn for about 400 000 students.
When he announced Nxasana’s appointment, higher education & training minister Blade Nzimande said that with his experience, the former FirstRand CE was the best candidate to steer the scheme.
Nxasana will have to think outside the box to ensure that the NSFAS, which is owed R6,6bn in overdue loan repayments, finds a way out of its precarious position. He says the scheme has now come up with strategies to recover debt more effectively, raise funds and improve efficiency in the administration of loans and bursaries.
“[The] NSFAS board approved a fundraising strategy and presented it to the department of higher education & training and to parliament. The strategy focuses on getting additional funding from private sector and other donors,” Nxasana says.
The scheme has been the primary source of funding for poor students. Part of its funding comes from the department.
However, a funding shortfall has meant that not all the disadvantaged students who rely on the fund have been accommodated. This, along with universities running out of places for all the students who apply, remains a big problem.
that have been hindering the fund are administrative corruption and student fraud. Employees of the fund are alleged to have created “ghost students” who apply for and receive funding but never pay the fund back.
The scheme has also had trouble collecting money owed to it as student loan repayments. It recovered only R338,8m in 2014 and R247,5m in 2015.
Students are also culprits, as the department’s director-general, Gwebinkundla Qonde, noted earlier this year. He said there were a number of students who did not qualify for loans from the fund but were nonetheless benefiting from it.
Which is why Nxasana is supervising a probe into the fund, which was meant to start at the end of May but only began this month. The reasons for the delay could point to bigger problems in the scheme.
The department’s spokesman, Khaye Nkwanyana, says he isn’t sure why it took so long for the investigation to begin and refers questions to the DG’s office. “There were certain things tying it [the investigation] at the level of the DG,” he says.
He adds that the recommendations and findings of the investigation will be available within the next six months.
It is understood that an independent firm is spearheading the investigation.