Concern over student loan scheme as chair steps down

The resignation of the National Student Financial Aid Scheme (NSFAS) board chairperson has raised further concerns about instability in the scheme which came under excessive pressure after the announcement last December of free higher education for poor students in South Africa.

In a statement released on 9 August, the official opposition Democratic Alliance (DA) said the scheme was in “the throes of imploding”, and the loss of Sizwe Nxasana was “a sign of a very serious weakness at the heart of the higher education system”.

Nxasana, the former CEO of FirstRand Limited, was appointed by former higher education and training minister Blade Nzimande in 2015 to stamp out alleged corruption, and generally improve the efficiency of the scheme.

Referring to former South African president Jacob Zuma’s announcement ahead of the ruling ANC party’s elective conference in December that free higher education, including grants for fees, food, accommodation and study materials, would be introduced to all existing grantees plus thousands of additional students as from January of this year, the DA said: “No bureaucracy could survive the ensuing onslaught … The system could not cope. To date, there remain thousands of students whose 2018 grants are still not paid.”

Union welcomes resignation

In its own statement, the National Education, Health and Allied Workers’ Union (NEHAWU) welcomed the chair’s resignation as “a necessary step towards fixing NSFAS and helping it avoid being plunged into a further crisis of collapsing the scheme by those with no interest in serving poor students and the working class at large”.

“As NEHAWU, we have always been at the forefront of calling for Nxasana’s resignation since he was appointed in 2015. The national union has always been opposed to his appointment and we were proven right when he tried to increase state funding into NSFAS to establish an alternative student funding scheme to NSFAS, called Ikusasa Student Financial Aid Programme (ISFAP). The ISFAP is an initiative of Nxasana meant to swallow NSFAS through a partnership with South African leading banks, namely Absa and Standard Bank,” the statement continues.

The union called on current Higher Education and Training Minister Naledi Pandor to expedite the re-engineering of the board and the executive management of NSFAS.

Last month, Pandor ordered a halt in NSFAS applications for 2019 – due to open on 1 August – owing to a backlog in the allocation of student funding for 2017 and 2018.


In a statement on 29 July, NSFAS said while it acknowledged challenges in the implementation of the new policy, 2018 funding decisions for applications received had been completed and NSFAS had communicated the funding decisions to higher education institutions for over 400,000 university and TVET (technical and vocational education and training) students, including returning students.

It said it had opened an online platform to deal with over 20,000 applications which had no supporting documents and it had disbursed allowances to more than 365,000 students through the institution and sBux channels.

“There are some 70,338 first time entering students who have not yet signed their NSFAS Bursary Agreements (NBA) or Schedule of Particulars (SOPs) and 29,610 students whose registration data was received recently. The closing date for all students to sign their NBA is July 31, 2018,” the statement said.

Government review

According to local reports, Nxasana said in a statement: “The environment changed after the announcement by the then-president [Jacob Zuma] last year about the extension of free higher education and we had to change our systems and processes to accommodate the new situation. Government will now have to decide how to manage it going forward."

He said government has indicated it will now review the structure and organisation of NSFAS and that it is "only right" that he make way so that Pandor's department make the changes it sees fit.

Speaking to Radio 702 on 10 August, Professor Jonathan Jansen, educationist and former vice-chancellor of the University of the Free State, said the announcement by former president Zuma last year caused havoc for NSFAS because “you can't make that kind of announcement without thinking about the consequences for the administration of the massive loan system”.