The National Student Financial Aid Scheme (NSFAS) has lodged an appeal against a High Court ruling that makes way for fintech partners to continue paying student allowances directly.
In a statement issued yesterday, NSFAS confirmed an appeal against the judgement has been filed with the registrar of the Western Cape High Court as of 25 July.
“On that basis, NSFAS has been advised by its legal team that disbursements of student allowances may be made in the manner arranged in the past few months; that is through the institutions for university students and directly into TVET college student bank accounts.
“For the month of August, university students will receive their allowances through their institutions and TVET college students will receive their allowances directly into their bank accounts.”
NSFAS was dealt a blow last week when it was interdicted from terminating the contract with student allowances provider eZaga Holdings (eZaga). The ruling also provided a lifeline to the other fintech partners – Coinvest,Tenet Technology and Noracco Corporation.
NSFAS was also ordered not to allow higher learning institutions to pay allowances directly into students’ accounts. The ruling saw eZaga’s immediate reinstatement as a direct payment provider for universities and TVET institutions.
At the time, the financial aid scheme made its intention clear that it would appeal the ruling.
An entity of the Department of Higher Education and Training, the NSFAS runs a close to R50 billion annual budget, providing financial aid to eligible students at public TVET colleges and public universities.
NSFAS has, over the years, faced systemic governance issues, including IT system failures and mismanagement within the scheme. The latest being the selection four fintech providers to disburse monthly allowances to tertiary students.
The scheme brought onboard the four fintechs to manage the direct payments to students. This came after NSFAS introduced a new student funding system that would result in direct payments to students for their studies instead of the funds being managed by individual institutions.
The fintech partners were awarded the NSFAS direct payments contract, to the value of R47 billion, over a period of five years. However, that relationship turned awry, amid allegations of undue influence in their appointment.
Two of the fintechs – eZaga and Tenet Technology – have continually denied the allegations of corruption levelled against them in the awarding of the NSFAS contract.
While there has been a legal tussle between NSFAS and its fintech partners, the High Court’s decision was welcomed by Tenet Technology and eZaga CEOs, saying it marks a crucial step towards ensuring that students receive the financial support they need to succeed.
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