Outa: Four NSFAS contractors not registered as financial service firms
The Organisation Undoing Tax Abuse (Outa) claims four companies contracted by the National Student Financial Aid Scheme (Nsfas) to pay allowances to students' bank accounts directly are not registered financial service providers.
The civil society organisation claims all four service providers are relatively new companies with very little proof of experience as fintech companies, as Nsfas requires.
The final findings contained in an update of an October investigation report compiled by Outa on the direct payment of allowances come amid an outcry from students over the new system.
Unhappy students marched to the Union Buildings in Pretoria last Wednesday.
"One of the key findings is that although the standard monthly fee on the Nsfas monthly bank card was reduced to R12, the transaction fees were excessively increased, leaving students not in a better position than before,” said Outa’s Rudie Heyneke.
“The Nsfas CEO reported that if a side-by-side comparison is done between the cost of Nsfas bank card and commercial banks, the Nsfas card is very competitive. Our report shows this is not accurate. The fee and VAT of commercial banks are much better.”
Heyneke says there are more cost-effective ways to pay students' allowances.
"The fees that are deducted from the Nsfas students' account have a direct impact on every student. It is Outa's estimate that approximately R3 billion will be paid by the students as a collective for the remainder of the contract period of the current service providers.”
Heyneke said service providers should stop the onboarding of students until there is absolute clarity on the fee structure of the Nsfas bank card.
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