University of Johannesburg faces backlash over unpaid NSFAS funds to private accommodation providers
The University of Johannesburg (UJ) is under scrutiny as it owes millions of rands to over 30 privately-owned accommodation providers, according to reports.
The funds in question were meant to be disbursed by All Encompassing Switch (AE Switch), a company contracted by UJ for the distribution of National Student Financial Aid Scheme (NSFAS) funds to accommodation providers.
A company contracted by the University of Johannesburg to disburse funds to privately owned accommodation providers has not paid more than 30 accommodation providers millions of rands
Providers, who spoke anonymously, revealed that AE Switch has not paid them since July, causing financial strain on their businesses.
Accommodation providers are struggling to meet financial obligations, including salaries, service providers, and bond payments.
Some are reportedly on the brink of closure due to the non-payment.
The University of Johannesburg, which signed contracts with these providers, has allegedly made empty promises to resolve the situation.
“We had a bleak Christmas after UJ assured us that its finance office would not close for the festive season until all accommodation providers had been paid. But this was not the case,” said one of the affected service providers.
Accommodation providers, reliant on NSFAS funding for their students, are also facing challenges meeting accreditation standards for the 2024 academic year.
The lack of funds from UJ has raised questions about how these providers can pay fees for accreditation when outstanding payments remain unresolved.
The university was reportedly informed about concerns related to AE Switch when the company was initially appointed as the payment provider. Complaints ranged from the company disappearing with clients’ money to a problematic track record.
Despite these warnings, UJ proceeded with the contract.
In response to the situation, UJ spokesperson Herman Esterhuizen stated, “UJ is engaging with the affected service providers to ascertain the precise outstanding amounts owed by AE Switch.”
He added that the university is committed to holding AE Switch accountable and is ready to exercise legal remedies.
What the University of Johannesburg plan to do
The contract with AE Switch was set to conclude on December 31, 2023, and UJ’s management executive committee decided to reimburse affected accommodation providers.
The reimbursement process is reportedly underway.
Esterhuizen emphasised that the university follows thorough procedures in appointing service providers.
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