New student revolt feared amid NSFAS chaos

“Black child, you're on your own," a variation of Steve Biko's “black man, you're on your own", is a popular saying on social media, especially since the 2015 #FeesMustFall campaign. Biko's words at the time were the slogan of the South African Student Organisation (SASO).

‘Where are our allowances?’

THESE words have taken on a new meaning for me since revelations on January 4 by the Organisation Undoing Tax Abuse (Outa) about secret voice recordings in which higher education minister Blade Nzimande and the chairperson of the National Student Financial Aid Scheme (NSFAS), Ernest Khosa, are implicated in bribery by NSFAS service providers. At the same time, social media is awash with cries for help from needy students anxiously awaiting answers from NSFAS.

Most students want to know how their grant applications are progressing for the 2024 academic year, but many are still asking: “Where are my grants for 2023?" Others complain that they cannot register or get their final results because NSFAS has not paid their tuition fees. For many, this means they can't apply for jobs with their new degrees.

Due to the allowance payment fiasco, many students wrote their final exams with empty stomachs, as previously reported. Many did not have money to return home after the exams. (News24 reported on December 20 how one student sold his laptop for R1,000 just to be able to go home after a challenging year. Others' parents had to borrow money to help.)

On New Year's Day, the NSFAS board chaired by Khosa (he has since taken leave pending an investigation into the recordings) announced that it had held an extraordinary meeting. Issues discussed included payment arrears, a budget adjustment and action plan for 2024, a loan scheme, a pilot project for an NSFAS housing portal and the establishment of a “rapid response team” in preparation for the new  academic year. (The last followed hundreds of unanswered pleas and complaints about NSFAS on Twitter.)

The announcement included news that NSFAS had paid “about 234,124" in-arrears allowances since December 5, when a final reconciliation was done. The arrears were blamed on a change in student “registration data", something NSFAS implemented after deciding to freeze payouts halfway through 2023. It did this despite warnings from higher education institutions and Outa about removing responsibility for payments from universities and colleges and engaging four inexperienced service providers to take over. Outa also warned against corruption in the appointment of the service providers, saying it would cost taxpayers and the students millions of rand.

Unlike banks, which keep student costs as low as possible, students were told they would have to pay exorbitant transaction costs to the four service providers: Coinvest, Tenet Technology, Norraco and eZaga. These were in addition to the money NSFAS would pay the companies to provide the service. (One student told me the service provider deducted R12 in bank charges to pay her allowance. “I then immediately transferred it to my regular student bank account, which cost me a further R20, because the NSFAS accounts deals were just too expensive.”)

Why the shift to independent service providers? To prevent corruption, according to NSFAS. And for the approximately 20,000 students still waiting for overdue grants by December 31, the board had a comforting message: it was “determined" to complete all payments by January 15.

But by now, South Africans have realised they cannot trust princes, politicians and their comrades. On January 18, a new NSFAS statement said only 9,128 grants had been “successfully resolved". The other 11,000 would be “prioritised" but dealt with as part of 2024's “normal disbursement process". NSFAS said the fault lay with tertiary institutions that had not yet provided registration data. (Remember, students had to register on the service providers' portals to receive their grants from the end of June. What happened to that registration data?)

‘Where are we going to stay?’

A new, much bigger crisis involving student housing is now brewing.

“According to their planning, NSFAS lacks 397,000 beds this year for students who use the scheme," says Rudie Heyneke, Outa's head of investigations. This figure was also presented to parliament's higher education portfolio committee by the NSFAS board on October 4.

Heyneke adds: “To everyone's surprise, only 25,803 (or 6.5%) of this number of beds had already been accredited, and we warned that there would be major problems if students started returning to colleges and universities for the new academic year. We wanted to prevent a repeat of last year's chaos." (Repeated inquiries about how many beds were accredited and available by this week were directed to Ishmael Mnisi, NSFAS's spokesperson. None of the messages was read or answered.)

The chaos to which Heyneke referred erupted when NSFAS, days before the start of the 2023 academic year, suddenly reduced the housing allowance from R60,000 to R45,000. (This amount is payable over 10 months. During the other two months the buildings stand empty and owners still have to finance running costs and maintenance.) As a result of this decision, many students had to live in public toilets, libraries, university buildings and other public spaces until universities and NSFAS could develop emergency plans.

Owners of facilities developed for NSFAS students according to the scheme's strict guidelines said the R15,000 reduction in what they would receive for every student was unsustainable due to rising interest rates, maintenance costs and municipal bills. NSFAS students were as welcome as others, they said, as long as they signed tenancy agreements and paid the shortfall themselves. Unfortunately, few could afford to do so.

Unfair? Decide for yourself what accommodation is worth when it must comply with the following rules:

• Single rooms must be larger than 8m² and double rooms at least 14m².
• Bathrooms must be arranged as follows: one sink for every four students, one shower cubicle for every seven and one toilet for every five.
• All rooms must be furnished to a set standard. Internet access and a laundry service or equipped laundry rooms are required.
• Kitchens must have refrigerators of a specific size, microwave ovens and four-plate stoves (the quantity is determined by the number of students who use them). Lockers must be provided for each student's groceries.
• Zoning, safety and other municipal and construction requirements must be met. Fire prevention measures and equipment, such as fire extinguishers and hoses, are strictly regulated.
• There must be a live-in caretaker and cleaning staff are required.
• Depending on the distance from campus, owners may be required to provide transport for students.

Ask anyone with children at university what they pay for accommodation and you will realise that R45,000 a year is far too little for what NSFAS expects. As a property developer told Heyneke, “NSFAS made us build five-star accommodation but is now only willing to pay three-star rent”.

OUTA's investigation also revealed that NSFAS was not following its own rules. “Their requirements determine that the accreditation teams must consist of an occupational health and safety inspector, a building inspector, an engineer and an electrician. But most of the 39 service providers appointed to inspect residences do not meet these requirements," says Heyneke.

“We went to see who got the tenders and there are individuals ranging from debt collectors to government officials, people with political connections, someone charged with money laundering and corruption, and even real estate developers who are also now accreditation agents. Some companies that won the tenders were only registered after the tenders were advertised."

The accreditation system leaves the door open for corruption and affects hundreds of reputable accommodation owners. From now on, they must pay between R100 and R200 per bed to register accommodation on NSFAS's portal. And the portal, operated by independent and inexperienced service providers, keeps 5% of rental income.

If one takes NSFAS's figure of 397,000 beds, at R100 a  bed the portal (or maybe a few politicians?) makes R39.7 million just from registration, a process that must be repeated annually. Add to this 5% of the monthly rent, an amount that's hard to calculate because accommodation prices  vary according to rating and location. Rural accommodation — at technical and vocational education and training (TVET) colleges, for example, is cheaper than university accommodation in cities.

According to Heyneke, however, the 5% could amount to R600 million a year. “Taxpayers' money needs to know where it's going. It should be used for needy students but now it probably ends up in the pockets of cadres with connections. We should not rest until we have uncovered this matter," says Heyneke.

Outa's revelations of corruption in the accreditation process were ignored, as were warnings about the inexperienced service providers who took over grant payments. But this time, the consequences were  much worse.

The victims

By Wednesday, January 24, Cynthia*, a 22-year-old TVET student at Northlink College in Cape Town, says she and around 700 others had been homeless since the college opened for registration on January 8. The reason? The NSFAS accommodation portal is still not working. 

Cynthia is a bona fide NSFAS student. Her parents, aged 72 and 64, are South African Social Security Agency pensioners. She arrived in Cape Town on January 10, and as a returning student who passed her first year she didn't expect any problems. She received R6,030 from her allowance last year and is still waiting for four overdue payments.

Several hundred students arrived in time for registration but many, including Cynthia, first had to pay at least a quarter of their outstanding tuition fees even though NSFAS is responsible for them. Cynthia's parents had to borrow the money and she had to make a police statement that they were too old to travel to Cape Town to sign a plea agreement. Cynthia had to sign it herself just to be able to register. (In a speech on Wednesday, Nzimande said NSFAS is negotiating with institutions to let students register despite unpaid NSFAS bills.) 

Then came the next shock: the accommodation portal was not working and no one could find a place to stay. Cynthia began by sleeping near a police station then moved to a parking garage with a large group of students. “We sleep on cartons that we pick up with everything we have to keep with us all day. I only have a small fleece blanket with me. We must pack up in the morning at sunrise because if the building owner catches us there, we can get into big trouble. Our girls have received many offers for accommodation but we fear for our safety. Who knows what could happen if we don't stick together?”

Since Friday, Cynthia has been lucky to find a home with Steve*, who has been involved in student housing for more than a decade.

‘I want to help but I can’t’

Steve says arrangements between him and the TVET college, whose students he accommodated, have always gone smoothly. Until a week ago, his building stood empty despite a queue of several hundred students at the gate. Most were students who also lived there last year. “I couldn't take them in until the portal placed them with me," he explains.

By August, he had paid more than R60,000 for accreditation but his building was inspected only last week and he still doesn't know whether it was approved. He says the inspectors were clearly inexperienced and did not know, for example, what colour notice boards for fire hoses and emergency exits should be. “They also didn't have the necessary paperwork and didn't even know where my building was."

Steve wants to know why the accommodation portal wasn't operating before students registered, “They first had to go to the campus with all their belongings to register, after which they would gain access to the portal to look at accommodation options. And the portal is still not working. This incompetence forces students to sleep at night at petrol stations, near police stations, in parkades and libraries. Most are from the Eastern Cape and have someone in Cape Town who can help."

Steve says he can no longer watch students suffer, so last Friday he opened his accommodation as an emergency shelter. “I don't ask them for a cent but at least now they have electricity to cook, showers, and internet to try to get on the portal." But Steve also had to clarify that he could help only until January 31. “If NSFAS has not agreed with me after that, I will unfortunately have to evict them and then I will look like the pig in the story."

He took in about 400 students and Cynthia estimates there are still about 300 sleeping on the streets. But should Steve allow them into his building, he could get into big trouble. “Just think what will happen if a fire breaks out."

Profecia IT, Newdawn Technologies, Xiquel and Training Young Minds are the companies that jointly operate the housing portal. Steve says Ebenezer Smith, CEO of Profecia IT, promised just after new year that the portal would be working by January 7.

Steve says the students become like family. “They are just children who want to improve themselves and bring hope to their families." But he fears the growing unhappiness could lead to an even bigger protest than in 2015. “And you know, after what I experienced with them this year and after last year's unpaid allowances, I can understand that. Last year, we had to help with food because the grants weren't paid. This year, I'm protesting with them.

“Our government does not realise this could lead to South Africa's Arab Spring. This corrupt government's actions are radicalising students. Unfortunately, students see the militant leaders as the only ‘voice' against the current order.”

Steve decided to take legal action against NSFAS to clarify his situation. “We don't know how much we will be paid for accommodation this year if selected, nor have we had a lease yet."

‘This system cannot replace humanity’

John* is a member of the Student Landlord Forum, which includes private housing providers from Belhar, Bellville, Kuils River, Glenhaven, Ravensmead, Goodwood, Parow and Wellington. They provide private housing to students from the University of the Western Cape (UWC) and the Cape Peninsula University of Technology. He has accommodated students for more than 20 years.

“It's the first time in all these years that there is absolutely no accredited private accommodation available when students return. Here comes huge trouble," he warns. “We want to help the NSFAS students but about 98% of the owners have decided not to register on the portal. Why should we lose 5% of our monthly pay if we provide a good service? Then, we have to pay up to R200 in addition to having our properties accredited, something the universities themselves did in the past. Between the universities and us, the system worked very well. People who know nothing about this determine what we may charge for our accommodation." (Smaller accommodation providers pay R200 a bed, karger providers R100.)

According to John, UWC has no idea why universities can no longer accredit private housing. “They claim  their opinion was never asked." According to Heyneke, there was a pilot project at three institutions but the outcome is unknown.

John says that during an online information session with NSFAS on  December 28, someone asked why the University of Cape Town and Stellenbosch University were not part of the online portal pilot project. “No one could answer us. Ebenezer Smith of Profecia, the service provider, referred the question to NSFAS. They haven't replied to this day."

John, a father of four and a grandfather, is interested in his students. “My wife and I walk a path with our students. We become like surrogate parents. Some even ask after their studies if they can stay another year to find their feet in their profession. We have spent nights at these children's hospital beds and often help with food when there is none. We cry with them when things go bad and rejoice at every achievement. No online system can replace that.”

He is concerned about the possibility that this crisis could lead to violent protests. “People can die, and it's probably going to be taken out again on the institutions when it's not their fault. NSFAS must take responsibility for this mess.”

‘I now understand why student protests sometimes get out of hand’

Pieter and Anne* are discouraged. Their WhatsApp signal is terrible because their electricity was switched off last Monday and the Wi-Fi no longer works. They were subcontractors for one of the 39 companies that won the accreditation tender. Both have worked in the property industry for years.

“Look, you don't need a degree to do this job but you need experience in building inspections. I usually inspected the rooms and Pieter was responsible for the safety inspections and plumbing," says Anne. They inspected several thousand beds in two provinces last year. Fuel and accommodation costs amounted to thousands of rand. But they still haven't seen a cent of the R250,000 they were supposed to be paid, despite a written undertaking by NSFAS that all outstanding payments would be made by October 6 last year. 

They feel hopeless. “The bank repossessed our vehicle three months before it was due to be paid off. Fortunately our house is paid off, but we are bankrupt. We have no money to live on and borrow a car from friends," says Anne.

They are bitter because NSFAS stopped communicating with service providers. “They don't even answer their phones any more when any of our contractors call, and they ignore all emails," says Pieter.

The properties they inspected had paid accreditation fees to NSFAS, so  there must be money to pay them, they say. (They get about R36 per bed from the R100 service providers pay to NSFAS, and the company that subcontracted them gets R44. It is also waiting for payment.)

Most of the properties they inspected met NSFAS's requirements. If they didn't, they failed. Has anyone ever tried to bribe them? “Oh yes, we just refused, even though we already struggled financially."

They talk about the intimidation some property owners experience from universities and students. “One person whose property passed the inspection with flying colors said that a group of student representatives wanted R100,000 to ensure they got enough student tenants. When they refused, the gang returned after moving students in, turned on all the fire hoses so the building was under water and forced the frightened students to move into another building."

Pieter is bitter but says that after this experience, he understands for the first time why student protests become violent. “These poor NSFAS students are truly the poorest of the poor. All they desire is a better life for themselves, but everyone — the system and people in the system — screws them and fails them.”

Anne talks about her conversations with students. “They long to go home, struggle with adjusting to university, often have study problems, and also struggle to keep body and soul together with their allowances. The money may sound like a lot, but think about it: will you be able to pay for food, toiletries and taxi fares to and from campus with it?"

Pieter says he now understands that reason flies out the window when you are pushed into a corner, as is often the case with students. “I am a moderate man, but now that I have nothing left to lose I will do anything just to be paid what is due to me. I will do anything to get my money."

* Professor Lourens van Staden, appointed as acting chairperson of NSFAS in Khosa's absence, was approached for comment. In a polite message, he said he would not speak to the media yet. However, it appears from inquiries to institutions that he has started meeting them  about the crisis. Nzimande was due to visit the NSFAS office yesterday. Repeated inquiries to NSFAS spokesperson Ishmael Mnisi about accreditation figures remained unanswered. By 10.30am yesterday, the accommodation portal was still not working.

*Cynthia, Steve, John, Pieter and Anne are pseudonyms.

♦ VWB ♦

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