Dear Sir/ Madam

NSFAS implemented direct payment to NSFAS beneficiaries, a function that was managed by educational institutions to students. They appointed a third-party company to disperse allowances to NSFAS beneficiaries with astronomical bank charges. Students had a limit on withdrawals. Each withdrawal means more deductions in high bank charges. Many do not have financial support other than NSFAS. More worrying is that many students did not receive allowances for 2023. These third-party companies were in contract with NSFAS and already receiving payments for their services, yet still continued to exploit students. It is clear that NSFAS does not have the capacity to take on the direct payment system, and therefore, I recommend that the function be handed back to institutions.

Student accommodation is worrying. I see red flags in the NSFAS accreditation pilot project, implemented this year. Private student accommodation landlords said they were not consulted in the process before roll out.
The NSFAS accreditation pilot project: institutions selected for the pilot project, including private accommodation landlords, must register on the NSFAS portal for accreditation. If not accredited by NSFAS, no payment will be received for accommodation.
Concerns:
- NSFAS does not have the capacity for direct payments to students. How are they going to manage landlords and institutions?
- Accreditation is done by NSFAS, but a third-party company was hired to provide the service.
- The third-party company members have an interest in / own private student accommodation. Transparency and impartiality are questionable.
- After applying online, landlords have to pay the third-party between R150 to R200 to come out and evaluate the property for accreditation. The company was contracted by NSFAS and already being paid by NSFAS to render this service. Why must landlords pay the third-party? Accreditation was done by institutions. UWC did this free of charge.
- Properties are then graded from A to E and payment determined according to the grade received.
- NSFAS demands 5% of the payment to vendors for each accredited bed. It is like going to Shoprite and demand that you want to pay R5 for a R10 loaf of bread and then want 5% of the sale of the bread if you want my business. This translates to kickbacks and unethical practice.
- Contracts between landlords and students are generated by NSFAS. The property does not belong to NSFAS. The owner should determine his rental as well as conditions of contract as each property is different. Maintenance is done by the owner, not NSFAS. Should your grading be an E, and the payment R1500 per month, for example, the landlord runs his business at a loss. Landlords have bond payments, wifi, security, electricity, water, transport, fire certificates, electrical certificates, police clearance and staff to pay. Expenses exceed the income.
- Private vendors do not agree with the rezoning certificate required. Some landlords are pensioners renting out a room. Rezoning cost about R40 000 with no guarantee of approval. Properties will then be classified as business. Pensioners will have to pay business rates and taxes. It's a permanent commitment for a short-term contract.
-Only certain institutions were selected for the pilot project. How was the selection done and what criteria was used. UWC indicated that they did not agree to the pilot project. Private landlords said that they were not consulted and rejected the pilot project. The definition of a pilot project: it is a test run, a voluntary process unless mandated by a court to participate. NSFAS already implemented the process as binding to users with no freedom of choice.
-Landlords and students complained that correspondence to NSFAS goes unanswered. Open dialog, transparency and consultation are required with all roleplayers involved.
- The direct payment system and pilot project need to be suspended.
- NSFAS need to upgrade to an integrated working IT system together with institutions.
- Regular vetting of staff.
- Decisions regarding change of policies need to be discussed with relevant roleplayers before implementation.
- Criminal charges against those committing corruption.