It is estimated that approximately R320 million in funds intended to support students remain unused in accounts related to the discontinued Celbux voucher payment system of the National Student Financial Aid Scheme (NSFAS). The Special Investigating Unit (SIU) reported that some educational institutions are refusing to return these funds, claiming that NSFAS owes them money for previous academic years.
These findings were presented by the SIU to the Parliamentary Committee on Higher Education, where an update was provided on key investigations into dysfunctions within the financial aid system.
The SIU informed the committee that it has received 14 directives to investigate matters in higher education between 2017 and 2025. Eight of these investigations have been concluded, and six are ongoing.
One of the most significant discoveries relates to the NSFAS direct payment system, through which scholarships are paid directly into beneficiaries' bank accounts. The SIU found that NSFAS acted 'contrary to its own directives and in violation of Section 217(1) of the Constitution' when entering into five-year contracts with four service providers—Coinvest Africa, Tenet Technology, Ezaga Holdings, and Norraco Corporation—to administer these payments.
In June, the High Court of the Western Cape declared NSFAS's decision to appoint the four service providers unconstitutional and invalid. However, the court ruled that while the procurement process was flawed, the appointed service providers were not involved in any improper administrative conduct, malpractice, or corruption.
The SIU also expressed concern regarding the former Celbux voucher payment system, which was discontinued in 2022 when NSFAS transitioned to direct student payments. According to the SIU, numerous 'inactive' accounts dating back to 2018 remain active in the Celbux system, with a cumulative estimated value of R320 million.
The Celbux system used vouchers generated based on the mobile phone numbers of registered students to make payments. The SIU visited 58 institutions across all nine provinces. Most visited institutions were aware of outstanding credit balances that should have been returned to NSFAS after the closure process and documentation signing. Nevertheless, the SIU encountered resistance from some institutions.
The report indicates that 'some institutions insist they are unwilling to return money to NSFAS because they are owed money for certain academic years.' This comes against the backdrop of NSFAS allegedly owing higher education institutions R10.4 billion in unpaid fees, according to an update previously presented to the Parliamentary Portfolio Committee on Higher Education this month.
The SIU instructed institutions to return part of the credit balances due to NSFAS while disputes concerning absent students are being resolved. The report states that 'institutions that have deposited funds into an interest-bearing bank account are advised to return all credits with accrued interest on those balances.'
The SIU also discovered that over 40,000 students across 76 higher education institutions were incorrectly funded, amounting to R5.1 billion. Dr. Tato Masekoa, a representative of the South African Union of Students (SAUS), stated that these findings cause deep concern.
Masekoa noted that 'R5.1 billion in incorrect funding, inactive student accounts, institutional overpayments, weak accommodation control, and procurement irregularities point to systemic failures that cannot simply be viewed as accounting problems.' He added that 'they directly relate to the governance, accountability, and integrity of the student funding system.'
Masekoa emphasized that accountability must be fair and proper, asserting that students should not bear the consequences of failures in the NSFAS system. He also stated that SAUS believes accountability must be fair, evidence-based, and properly directed. Students who were incorrectly funded due to failures in NSFAS systems and controls should not automatically become victims of institutional failures they did not cause.
He concluded that 'the billions being recovered must ultimately transform into better systems, faster payments, stronger oversight, and greater support for students who truly deserve funding. We need an NSFAS that is transparent, technologically robust, properly governed, and capable of protecting every rand designated for student success.'