It's going to take more than a two-year term under administration to fix the rot at the National Student Financial Aid Scheme (NSFAS), says Freeman Nomvalo, who was parachuted in to do the job just over six weeks ago.
“We can do significant work, but organisations in this much trouble take longer than that to be turned around,” says Nomvalo, a former CEO of the South African Institute of Chartered Accountants.
Nomvalo, appointed by higher education minister Blade Nzimade as administrator of the corrupt and dysfunctional state entity for a one-year term, renewable for another year, says he has been “putting out fires” since his appointment in April.
He has gone to court to cancel contracts with irregularly appointed service providers who, instead of paying NSFAS grants to students from the poorest households for their tuition and accommodation, left them high and dry.
I hope the lesson has been learnt that when you have stability in leadership you need that leadership to be there for some time. You can hold them accountable to deliver
— Freeman Nomvalo, NSFAS administrator
He aims to have all NSFAS grants paid directly into their bank accounts by August.
By the end of last month most of the accommodation providers with long-outstanding payments due to them had been paid.
When Nomvalo arrived students were burning tyres at their campuses because they were facing eviction, and phoning him round the clock to say they had no money for food.
“No more challenges are coming from the students,” he says. “The next phase is ensuring we pay for value.”
There is a cap on the amount NSFAS should be paying for food and accommodation, “but service providers have been paying out costs above that line or gravitating to that line even though their costs are much lower”.
Nomvalo has been working closely with the Special Investigating Unit, which has recovered R738m that NSFAS overpaid to providers, but he is still to begin acting against complicit NSFAS officials.
“The approach I’m taking is to be guided by the outcomes of the SIU investigation. When you come into an environment like this it’s easy to be pointed in directions where people want you to focus in order for them to sidetrack you.”
He has brought in a team to help him “verify things”.
“In due course we’ll definitely take the necessary action.”
Rooting out compromised individuals as soon as possible is essential because as long as they remain NSFAS will be fighting a losing battle against corruption, he says. And he may only have one year.
Nomvalo hopes that if the “authorities” are happy with what he achieves they will tell him to keep going for another year. “They might also say, ‘We can take it from here.’”
The concern is that when he goes NSFAS will quickly revert to chaos and corruption, as it did when a previous administrator deemed to have rescued it from the swamp left after a two-year stint in 2020.
Nomvalo says he “can’t guarantee at all” that the same thing won’t happen when he leaves.
“But I hope the lesson has been learnt that when you have stability in leadership you need that leadership to be there for some time. You can hold them accountable to deliver, and it also creates stability in terms of having people with institutional memory.”
State entities become vulnerable to rogue service providers when these people have been in place longer than the officials supposedly in charge. “That scenario is not desirable. Any entity in the country that does not have that kind of stability is in trouble.”
Favoured NSFAS service providers held on to their contracts for years, Nomvalo says. But when they are no longer adding vaule, there’s no reason to keep them.
Excluding middlemen eliminates opportunities for corruption and creates efficiencies by lowering costs, he says.
Do you want to get me fired? My role as an administrator is to make sure NSFAS works and works well with the limited resources we have
— Nomvalo
Corruption and excessive costs are why NSFAS, with a budget of R50bn, had a budget deficit of more than R1bn in financial 2024 and currently can only afford to pay tuition and accommodation for well under half of the 1.9-million desperate students who have applied for help.
NSFAS can only remain financially sustainable by cutting its costs or leaving out a large chunk of students who apply for grants. “You can only fund to the extent you’re able to pay, which means we’ll have people left out and not covered. We already have the issue of the missing middle that needs to be taken care of.”
Nzimande caused some concern in January by announcing out of the blue, shortly before the start of the academic year, that NSFAS would implement a new loan scheme to take care of these students in 2024.
NSFAS has received 30,000 applications but almost halfway through the academic year is still “finalising the number we can afford”.
“Only R3.8bn is available, so we can’t afford many if you have to cover them for four years of study,” Nomvula says. Not more than 15,000, he says, and it may well be less.
So is the fee-free higher education promised by the government sustainable? “That’s a question for my employers, the department of higher education; it’s a policy question. But it does come with its demands, that I can tell you.”
NSFAS should be doing more to monitor the academic progress of the students it funds, he says. It needs to restrict the number of courses they can fail and years they can repeat so that resources are available for other students and “we don’t keep investing in the same person”.
In the six weeks he has been at NSFAS “the main emphasis has been putting out fires”. But addressing the issue of grant recipients who keep failing is “absolutely critical so that we are able to see a return on the investment we’re making”.
Only loans to the missing middle (those with annual family incomes between R350,000 and R750,000) are income-contingent, raising the question whether this should apply to all NSFAS payments. That, too, is a policy question, he says.
Would he like to see the policy more grounded in reality? “Do you want to get me fired? My role as an administrator is to make sure NSFAS works and works well with the limited resources we have.”
Can he put sufficient mechanisms in place to ensure NSFAS won’t collapse again when he leaves? “Putting effective controls in place is something I will do. Making sure they work well, I will do. But once I’m not there the people in charge may choose to follow that or not.”
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