The National Student Financial Aid Scheme (NSFAS) erroneously paid R5.1bn to more than 40,000 students between 2018 and 2021, the Special Investigating Unit (SIU) told parliament on Thursday.
The students who received bursary funding in error had parents who earned more than the limit of R350,000 annually. The R5.1bn, paid over the four years, is a fraction of the R49bn allocated for the 2022/23 financial year.
It is not yet clear how many students committed deliberate fraud and how many applied without realising they did not qualify, but some purposely used grandparents’ proof of income to fall under the threshold.
SIU head Andy Mothibi and director-general of higher education Nkosinathi Sishi were reporting to parliament’s standing committee on public accounts (Scopa) on Tuesday.
The SIU is investigating maladministration, unlawful conduct by employees of the NSFAS, as well as negligent and unlawful expenditure of public money at the scheme between 2016 and 2022 after the president signed a proclamation to this effect in August.
In 2017, Walter Sisulu University student Sibongile Mani went on a spending spree after her account was erroneously credited with R14m by the NSFAS instead of R1,400. She was convicted of fraud after spending R800,000.
An SIU investigator, whose name was withheld for security reasons, told Scopa that some students who failed to provide proof of parents’ income when applying still received NSFAS loans.
The SIU said the NSFAS system was not connected to the department of home affairs, the SA Revenue Service (Sars) and other databases to verify information by applicants. This has since been rectified, it said.
But in some cases, a student’s mother is the only person registered at home affairs so the institutions cannot always determine the father’s earnings. The NSFAS system could also easily be hacked, allowing for fictitious students to be created on it, the SIU investigator said.
Sishi told parliament that good governance at the NSFAS is important as it ensures access to higher education for 80% of students at universities and 90% at colleges.
Tertiary institutions and Technical Vocational Education and Training (TVET) colleges were also paid for students who may have applied or started studying but had dropped out, Scopa was told. Eight departmental officials from TVET colleges have been charged in this regard, Sishi said.
The SIU has received R38m so far from a Western Cape institution that was paid for students who were not studying with it.
In another kind of operation, accommodation providers and students work together in syndicates to defraud the NSFAS, the SIU said, without elaborating.
Sishi said a report containing 28 recommendations for more sustainable funding mechanisms to replace the NSFAS is ready to be handed over to the cabinet.
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