Smart card system no more: maintenance grants transferred directly to account

Students' maintenance grants to be transferred directly into bank account saving government a yearly €175,000 in administrative costs

A revamp of the students' maintenance grant system will see the removal of the smart card system and instead funds will be deposited directly into the students' bank account.

According to Education Minister Evarist Bartolo, the measure will be saving government an annual cost of €175,000 in administrative costs.

"The Auditor General had flagged the ineffectiveness of the smart card system in the sense that the costs in administering the scheme could be outweighing the benefits derived," Bartolo said.

He added that the new system would simplify the students' life even in terms of applying for the grant - now through an e-form - and in refunds for educational material purchased online.

Bartolo added that the government has yet to collect over half a million euros in overpayments - monies that have been accumulating since 2001.

"Although the government is authorised by law to collect these monies, the law was never enforced during the year," Bartolo said.

The government's plan is to start enforcing the law in the case a student drops out of University mid-way. The government will collect back those monies owed by the student, calculated on when the student dropped out of University.

The Education Minister added that students were already spending their grant in non-related educational expenses and, in this way, student would learn how to be responsible with their money.

KSU President Gayle Lynn Callus welcomed the reform but called on government to ensure checks and balances are in place on how the students spend their grant.

"It is positive that the amount given to students remained untouched but we also encourage government to implement the necessary checks and balances. At the end of the day, these are taxpayers' money," Callus told MaltaToday.

Callus acknowledged that students abused the system: "We know there were abuses and government should not allow space for further abuses."
As an idea, Callus said students could present receipts showing that the money was indeed spent on educational purposes adding that such a system was adopted with refunds.

"We also encourage students to be responsible in how they use their grant," he added.

The student smart card was originally meant to help with costs for educational material but over the years students have been able to purchase anything – including sportswear, footwear and eyewear.

The running of the system has to date cost the country over €2 million – a sum that covers only the handling fee the government pays APCO Ltd, the company which organises the smart card system. It excludes salaries and costs related to human resources deployed by the government at the University of Malta and other departments to run the system.

The contractor receives almost 2% of the purchase value of items bought with the smart card. Between 2009 and 2012, the government allocated over €87.5 million in stipends.

Maintenance grants make up approximately 40% of this allocation, which means that some €35 million were put in smart cards for students’ consumption. 

With a 1.9% company charge to suppliers, the contractor is estimated to have raked in €665,000 in three years just from the purchases students made.

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