Student financial aid rife with corruption and maladministration

The Department of Higher Education and Training is calling for nominations for the National Student Financial Aid Scheme (NSFAS). The nominations must be submitted by the first week of August 2020.


Perhaps its time the public paid more attention to what is happening with student aid, and to get strong public and taxpayer representation on NSFAS.

The NSFAS has an annual budget in excess of R30 billion and employs about 400 people.

“There is no question that free or subsidised higher education is a great equaliser. It allows students from poor families to reach the highest levels of academia and then leverage that education in the job market,” says DearSA’s Rob Hutchinson.

“Given the huge annual budget under NSFAS control and the reports of maladministration that have dogged it in the past, we need to pay close attention to who gets appointed to the board and so represent the public and taxpayer interest.”

We should also be wary of any governmental scheme giving away free money, as experience has shown that this is a bottomless pit for crooks.

A rather shocking piece of news reported in March this year is irregular expenditure in NSFAS amounted to R7.5 billion in 2017 and 2018 due to maladministration.

Jaw-dropping figures like this seem to be rather routine in NSFAS.

NSFAS administrator Dr Randall Carolissen attributed this to irregular records in the system, resulting in wrong payments to the wrong students at the wrong time. It is estimated that up to R2 billion of these funds were irrecoverable.

Who can forget the luckiest student alive, Sibongile Mani of Walter Sisulu University, who in 2017 received R14 million instead of R1,400 from NSFAS by mistake and blew more than R800,000 of this before being caught out.

In 2018 the Hawks arrested six staffers at Unisa, including the payroll administrator, for creating ghost students to defraud the SA Agency for Science and Technology (SAAST), under the administration of the National Research Foundation of South Africa. The amounts involved in this case totalled R1.7 million.

There’s also potential for those in charge of bursary funds to favour family and friends. Also in 2018 it was reported that then North West Premier Supra Mahumapelo’s son had received a R1.1 million bursary from Denel to study at an elite aviation school in Port Alfred.

Public Enterprises Minister Pravin Gordhan instructed Denel to launch an internal investigation into the matter, and also called for a criminal investigation into possible abuse of public money.

The Parliamentary Monitoring Group (PMG) last week reported that the Department of Higher Education and Training had been instructed by Treasury to reduce its budget by 20%, amounting to R19.5 billion, though only half of this had so far been deducted from its budget. NSFAS is reported to be expecting a drop in the collection of recoveries due to the impact of Covid-19 on the economy. An amount of R4.9 million will be reprioritised for Covid-19 impacts. NSFAS has objected to the suspension and reallocation of funds for students.

The NSFAS is a statutory body established to allocate funds for loans and bursaries for higher education students. Those who qualify for loans are required to pay them back once they graduate and start working.

The NSFAS board as a whole must be representative of the higher education system, with knowledge of higher education and “its role in meeting the reconstruction and development needs” of the country. The board should also have financial expertise and experience.

If you have any nominations you would like to suggest (perhaps even yourself) send your CV and a letter of consent indicating the nominee’s availability to serve on the board If appointed to mampane.g@dhet.gov.za.