Andile Nongogo is at the helm of the National Student Financial Aid Scheme (NSFAS) as it celebrates 30 years of operations. He is confident that this journey has been successful and an effective response to the dire need for funding in education. BBQ editor Prof JJ Tabane sat down for a chat with Nongogo to explore various themes of the 30-year journey of NSFAS.
What three key successes stand out for you from the path that NSFAS has traversed in the last 30 years?
- The establishment of the scheme is significant. It has made it possible for many people who would not have been able to access higher education to do so. I believe this scheme is one of the most successful programmes of the government in transforming people’s lives. Furthermore, this is the only scheme in the world that fully funds the cost of study for students.
- The implementation of the Student-Centred Model; wherein students apply directly to NSFAS for financial aid. This transition required a significant increase in NSFAS resources and involved major changes to the systems and the processes for the scheme to handle a large number of student applications. The Student-Centred Model ensured that services were rendered directly to beneficiaries and by 2014, 15% of students were registered onto the model, which provided vouchers for accommodation and meals, directly to students. This figure doubled in 2015 to 30%.
- The pronouncement was made in December 2017, declaring education in public universities and TVET colleges free to qualifying South Africans. This saw the scheme transition from a loan administering scheme to a complete bursary offering entity, meaning that students funded from 2018 onwards need not pay the money back.
Please take us through the growth in student numbers over the years…
In 1991, the Tertiary Education Fund for South Africa (TEFSA) was established, disbursing a total of R21.4 million to the first cohort of about 7 000 students. In 1996, NSFAS was established. By 2009, a total of R3.2 billion had been paid to 191 035 university and TVET college students. In 2013, R8.8 billion was paid to 416 000 students. NSFAS can now boast assisting over 5 million students with funding since 1991. This is a clear indication that the government has prioritised the funding of students and increased equity and access at institutions of higher learning.
There has been significant growth in the number of students funded annually through NSFAS. From just over 7 000 students in 1991 to 708 147 currently. The majority of NSFAS beneficiaries are female.
The bare facts are that since 1994, NSFAS has managed to create almost universal access to education. This has been a near miracle given the state of disrepair that existed pre-democracy. And although many of our schools need repair and improvement, the situation since the inception of the entity has greatly improved.
How is NSFAS a response to the call for free education?
The call for free education is a matter that students have been raising for a while. We believe that the government has gone a long way in making this possible for poor students through the announcement of free education. The challenge is currently with the missing middle. Both for the current scheme and any inclusion of the missing middle need to take affordability and sustainability into account given the fiscal constraints.
The NSFAS was placed under administration a few years ago–please expand on why and how was this mitigated?
The 2017 short notice announcement to convert the scheme from a Loan Scheme to Bursary Scheme had a significant impact on the operations of the scheme. In terms of its organisational structure, its systems, processes, and internal controls, amongst other issues, the scheme and the higher education system had not planned for this change. Consequently, this resulted in a lapse in controls and governance, the scheme’s inability to make disbursement on time to its beneficiaries, thus leading to the NSFAS being placed under administration.
The administrator was then tasked to place governance, ICT and data integration, human resource management and organisational culture, core operational processes, and sector relationships and credibility as priority.
At the end of the administration, major improvements were visible. The application process was simplified, students were receiving their monthly allowances on time, funding decisions were being communicated prior to registration, and students had peace of mind. Those who were found to have had a hand in the maladministration were brought to book.
The current board took over when the administration left, focusing on instituting proper governance structures through the board sub-committees; improving the internal control environment, organisational policies, and processes; enhancing ICT systems; establishing fit-for-purpose organisational structures; reaffirming the student-centred model; and improving on student funding criteria, systems, and processes.
What are the mechanisms in place to avoid glitches of students not receiving their allowances in time? Do you have statistics of how often or not this challenge occurs?
Firstly, it is important to understand how allowances are currently disbursed to students. University students are currently paid through their institutions after NSFAS receives valid registration records of the students. NSFAS thus pays universities three months in advance to allow for timely disbursement of allowance. Universities, in turn, are supposed to pay these allowances to students. There are some challenges with this approach; some institutions do not disburse allowances to students in a timely manner; there are instances where there are no set dates for the payment of allowances; institutions have different methods and mechanisms of how these funds are disbursed and accessed by students.
TVET colleges allowances were paid directly through the wallet systems. This was a cellphone-based system, which was susceptible to fraud and had a number of administrative glitches that prevented students from accessing these allowances.
NSFAS then sought an alternative secure and beneficiary-centred approach which will see students receive their allowances directly from the scheme through a bank card and removing the middleman. All NSFAS beneficiaries at universities and TVET colleges will start receiving their allowances and transacting through the NSFAS bank account as of the 2023 academic year.
Through the direct payment, NSFAS beneficiaries will receive their allowances for food, personal care, transport, etc. through a NSFAS bank account. After being registered on the system, students will receive virtual and/or physical cards they will use to transact. Additionally, students will be able to make online transactions such as EFT, prepaid purchases, receive from and transfer money to other existing banks, just as with a normal bank account. Other benefits include access to value-added services and ATM cash withdrawals and at retail stores.
The call for free education is a matter that students have been raising for a while. We believe that the government has gone a long way in making this possible for poor students through the announcement of free education.
What is the NSFAS current debt book?
The current book value of the loan book is approximately R40 billion, with valuation of about R5 billion. The valuation is based on the collections that the scheme is receiving. Over the last few years, we have seen a sharp decline in the rate of collections. While this can be attributed to the economic downturn, unemployment rate, etc. there is an indication that previous beneficiaries are no longer paying it forward. We call on those that are still owing to start paying. The scheme will be embarking on a few campaigns to ramp up its collection efforts in 2023.
What support does NSFAS offer its beneficiaries other than the grant?
NSFAS’s intentions of late has been to look at student support holistically, as it understands that the overall performance of students relies on many factors other than financial assistance. Hence NSFAS has established a hands-on approach on issues such as those of accommodation provision to its beneficiaries, instead of merely making funding for residence available. NSFAS also offers special support to its beneficiaries with disabilities by ensuring that other than tuition fees, they receive support in the form of assistive devices based on the nature of the disability. NSFAS also has good relations with Higher Health, with the hopes of partnering with them in initiatives that ensure that NSFAS beneficiaries’ mental health is taken care of. One of the main initiatives that is on the top of the list is that of financial literacy; it is important that the scheme, being a financial aid provider, actively plays a role in instilling financial responsibility that goes beyond the university or college environment.
What is the plan for NSFAS to expand its capital base? Are you solely relying on government funding? Is there any envisaged collaboration with the SETAs? Is there an investment or fundraising strategy to expand the purse?
Like with many other similar schemes around the world, NSFAS is concerned about sustainability of the scheme, especially because the scheme is fully funded by the government and it competes with other government programmes. Furthermore, the administration budget to run the scheme is mainly funded through a budget allocation process. There is no correlation between student funding and the administration budget. Currently, the administration budget accounts for 0.8% of the student funding budget, which is not enough for the scheme to implement improvements in its operations in a timely manner.
Based on these factors, the scheme is in the process of finalising its fundraising strategy which will increase the funding base.
On the matter of administration budget, while the scheme continues to engage with DHET on the matter, it is in the process of developing a revenue enhancement strategy, which considers other value-added services the scheme could offer based on its student funding expertise and to continue administering funds for other funders for a fee.
What is the attitude of NSFAS on BEE in spending your allocation?
NSFAS is a public entity and as such it abides by the public sector guidelines on BEE spending on its procurement initiatives. However, this is an area that the board still needs to place more emphasis and focus on.
What digital innovation is NSFAS planning to enhance efficiency?
As part of the digital transformation within the organisation and to alleviate existing system problems that affect the scheme’s application processes, allowance disbursements and student accommodation for NSFAS beneficiaries amongst other, NSFAS conducted site visits to institutions, and these are some of the major interventions the scheme has embarked on:
- The need to rapidly evolve towards being an organisation that is digital-by-default (a need driven largely by changes in student behaviour, opportunities, and risks presented by exponentially evolving technology).
- As technology fuses with more processes across our value chain, a bimodal approach to digitalising NSFAS is required that balances the different needs, speeds of both our front-stage and back-stage environments and the connected student and stakeholder.
- The NSFAS front-stage deals with the external perspective or “what outsiders experience” when interacting with us. Transforming our front-stage entails a techno-cultural transformation across the financial-aid value chain involving multiple stakeholders, most notably students. It is a shift that fundamentally changes the relationship between funders, institutions, and students, promoting greater empathy and inclusion. In digitising our front-stage, we will place our emphasis on convenience and delightful student and stakeholder experiences.
- The NSFAS back-stage deals with the internal perspective or “what insiders experience” when interacting with us. Transforming our back-stage entails modernising our technology infrastructure, platforms, and services, as well as our data supply chain, enabling our business processes to execute effectively and efficiently in a predictable, consistent, and resilient manner. In digitising our back-stage, we will place our emphasis on efficiency, cost optimisation, collaboration, and enhanced colleague experiences.
NSFAS Direct Payment Solution (NSFAS Bank Account)
Current methods of allowance payments to NSFAS beneficiaries include third parties and, as a result, there have been issues such as unauthorised access to beneficiary allowance and possible payments to ghost beneficiaries. NSFAS then sought an alternative secure and beneficiary-centred approach which will see students receive their allowances directly from the scheme through a bank card and removing the middleman. All NSFAS beneficiaries at universities and TVET colleges will start receiving their allowances and transacting through the NSFAS bank account as of the 2023 academic year.
Through the Direct Payment, NSFAS beneficiaries will receive allowances to cater for food, learning material/laptops, and/or travel to campus during their course of study. The current estimated number of NSFAS beneficiaries is 900 000. The institutions total 50 TVETs with +250 000 beneficiaries and 26 Universities with +650 000. Beneficiaries are being targeted for full onboarding by January 2023. Beneficiaries are in the process of being onboarded and will thereafter receive their cards loaded with allowances and transact via the new solution. NSFAS beneficiaries have received several communications alerting them of the new system (solution). Engagements with the affected institutions, student leaderships, and institutions management has been held to unpack the new solution and identify key institutions officials who will work with NSFAS. An onboarding programme is being coordinated by operations to prepare the institutions for the partner visits and give comfort that this is a NSFAS initiative, as well as support partners in their endeavour to reach the beneficiaries in a shorter time over a wider area.
NSFAS Accommodation Portal
The NSFAS Board and management conducted site visits to universities and TVETs across the country to witness first-hand what the issues related to student accommodation are. They identified issues such as insufficient beds being available to accommodate students, both private and institution-owned accommodation is not conducive for student accommodation and learning, and private accommodation providers were not properly regulated, amongst others. NSFAS will roll-out a student accommodation portal which will ensure efficiency in areas such as grading and accreditation of accommodation, costs, paying of private accommodation providers, small accommodation providers (“backrooms”), increasing student accommodation capacity.
To mitigate these identified challenges, NFSAS took a proactive role in the management of student accommodation, the organisation will implement an online system/platform that has both electronic and process elements to manage student accommodation. This system will identify, accredit, and grade beds for student accommodation, then assign students accommodation, and track transactions (financial, incidents, audit trails, etc.) between all parties involved. The system will enable students to apply for accommodation with an accredited accommodation provider; processing and placements of students; and keep an accurate record of all transactions between NSFAS, the student, and accommodation providers. Within the context of NSFAS mandate, the matter of student accommodation has been a subject of much debate in the sector. The challenges facing student accommodation vary from the state and availability of student accommodation to how the allowances for accommodation are being claimed for and used. Through numerous engagements with students, student leadership bodies, educational institutions, and accommodation providers, the NSFAS can firmly confirm that student accommodation, in general, remains a challenge. The challenges are notable in both private accommodation and institution owned accommodation.
NSFAS Student APP
NSFAS is in the process of developing a digital app to be used by students as an additional platform to engage with NSFAS. Once installed, students will be able to create profiles, apply, log queries, and check their application statuses on the app on their mobile devices. This is part of NSFAS’s adaptation to the ever-evolving digital space, which our stakeholder, the student, is more familiar with. The new platform is designed outside the current system design to ensure it does not inherit the current challenges being experienced. It will enable automated processing of received applications and ensure correct assessments. The platform has multiple channels that can be used by applicants and current beneficiaries to access NSFAS services.
Channels to be activated are:
- Student online portal (Web portal)
- Apply for funding
- Submit supporting documentation (where required)
- Track application status
- Submit banking details (if required)
- View statements
- View contracts and/or changes to the contract terms and conditions
- Launch an appeal (if required)
- Cancel funding
- Submit other requests available like question/complains/compliments
- Chat bot/live chat with NSFAS
- Initiate an appeal
- Cancel or withdraw appeal
- Upload confirmation of student registration
Mobile application
All above listed functionality for student online portal
- USSD platform
- Initiate capturing of application/appeal
- Cancel or withdraw application/appeal
- Track their application and appeal status
- Accept NSFAS Bursary Terms and Conditions
- Accept Terms and conditions for the application
- Reset portal password
- Restore profile credentials
- Integration with other NSFAS Systems
- Enable seamless integration with other internal systems
- Integration with Institutions and Other Service Providers
- Enable seamless integration with 3rd party systems
Has anyone taken the fall for the enormous allocation to a student in the Eastern Cape?
It is vital to note that NSFAS has not suffered any financial loss due to this incident. NSFAS had, when the incident came to light, commissioned an internal audit review of its systems and controls, and confirmed that indeed no financial loss was suffered. Investigations were also conducted by Walter Sisulu University and DHET. The facts have revealed that the only entity that suffered financial loss due to the weakness in internal controls and systems that led to this incident was Intellimali, a service provider appointed by Walter Sisulu University. Thus, NSFAS did not institute any criminal proceedings against the student or any individual as there was no basis for it to do so.
How are you addressing the issue of historical debts of students? There is a call from student organisations to scrap this debt? What is your position on this?
During 2019, then Minister Naledi Pandor identified R1.9 billion to cover historic debt for NSFAS funded students who were previously funded with a cap and thus suffered a shortfall in covering the full cost of study. For these students, there are requirements to be fulfilled before they can be assisted under this fund. Among other requirements, students should have signed an acknowledgement of debt with their registered years, studied approved qualifications, and did not exceed the N+ Rules. Once these administrative compliances are cleared by their respective institutions, such students can be claimed for in the Historic Debt Fund.
What is your position on the issue of the Missing Middle? Is there consideration to fund students out of the criteria of income bracket? Is there no consideration for loans to such students?
The Minister of Higher Education, Science, and Innovation, Dr Blade Nzimande, established a Ministerial Task Team on the sustainability of the current student funding model. Part of the work of this task team is to look at the issue of funding for the missing middle. While NSFAS is part of that task team, it is not authorised to speak on behalf of the MTT.
What are the leadership lessons we can take from the 30-year journey of NSFAS?
- The importance of sector collaborations or collaborations with other government entities, which was more evident during the times of the pandemic, where NSFAS collaborated with entities like Higher Health, the GCIS in ensuring that NSFAS beneficiaries’ transition seamlessly into online learning. One important collaboration we enjoy is that we have with the NYDA where they open their doors every application season and allow students to use their resources to apply for funding.
- The impact of technology and digital evolution in simplifying the lives of existing and prospective NSFAS beneficiaries. It is hard to ignore the existence of the various digital platforms and the dependency of our constituency to it. Over the years, the scheme has had to move further away from manual and paper to make way for the 4IR, which is what applicants and students are accustomed to. From communicating using these platforms and ensuring that our application process is completely online. The NSFAS digital learning device where beneficiaries received laptops is also evident.
- The retainment of institutional knowledge is key for organisational growth. There currently isn’t a proper plan in place for the scheme to treasure knowledge and lessons gained over time, thus a new knowledge management unit was established to become part of the new organogram to ensure that there is a hub to store and own information.
How are you managing the student body expectations in general? Would you characterise the relationship as healthy and constructive?
Building a healthy relationship between the scheme and student leadership bodies is important and we continually engage with all the student bodies.
These bodies are consulted and informed of all major changes or improvements in systems that affect the lives of students. We also hear their views on matters that are affecting students.
Andile Nongogo
Chief Executive Officer
National Student Financial Aid Scheme (NSFAS)
Andile is a registered Chartered Accountant and has more than 15 years of experience in the profession of auditing, accounting, and executive leadership. He has served in both the private and public sector locally, as well as internationally representing the Auditor General South Africa at the United Nations Board of Auditors in New York. A global corporate citizen, Andile has the advantage of exposure to the diverse schools of thought in his profession from the various countries he has worked in, both developing and developed.
In 2014, he was appointed as Chief Financial Officer of the Services SETA. Under his leadership, the Services SETA improved from a qualified audit opinion to a clean audit opinion for two consecutive years. In 2015, Andile successfully completed an International Executive Development Programme at Wits Business School. In 2016, Andile was appointed Chief Executive Officer of the Services SETA. After being part of the team that turned around the financial administration and general governance at the Services SETA, he explored entrepreneurial ventures.
In 2020, Andile joined the administration team at the Vaal University of Technology in an advisory role, and his contribution proved invaluable in navigating the institution through the unprecedented conditions brought about by the COVID-19 pandemic that ravaged the world and higher education at large.
In December 2020, he was appointed Chief Executive Officer of the National Student Financial Aid Scheme (NSFAS), which had been under administration for several years. Within eight months of his tenure, NSFAS received an unqualified audit opinion from the Auditor General. This was the first time the institution had received such a positive audit outcome in many financial years.
This track record of strategic expertise, quality leadership, and executive excellence makes Andile a proven PFMA Specialist. He is an all-rounder who has repeatedly demonstrated his skills and ability to turnaround the financial management and internal controls processes of poorly performing public sector entities.
A personal beneficiary of government financial aid when he was a struggling student, meaningful customer service resonates with Andile and he believes in the principle of “People are not statistics, they are human”. He is passionate about quality public service delivery, and access to post school education and training. He insists on putting people first in a culture of impactful and quality dedication in bettering the life of all South Africans.
Andile Nongogo
