NSFAS begs education, finance departments for help amid R12bn funding shortfall

The National Student Financial Aid Scheme (NSFAS) is facing more than R12-billion in funding shortfall for the 2025 academic year.

This is despite NSFAS making early payments to universities and colleges to ensure students received allowances on time.

These details were confirmed by NSFAS board chairperson, Karen Stander, at the board’s inaugural press briefing at the GCIS Tshedimosetso building in Pretoria.

She explained that R39.3-billion was allocated for universities this year, and R28.86-billion has already been paid. This leaves an allocation balance of R10.4-billion and R10.06-billion shortfall.

“During this academic year, payments to universities were processed promptly, ensuring the timely disbursement of student allowances and supporting the smooth progression of the academic calendar.

2025 NSFAS oversubscribed

“However, in March 2025, NSFAS disclosed to parliament that in 2025 NSFAS is oversubscribed. Amounting to R10.6-billion for university education,” said Sander.

“For TVET colleges, R9.12-billion was allocated this year, and R6.44-billion has been disbursed. Allocation balance stands at R2.68-billion, and the funding shortfall of R1.6-billion.”

She explained that the financial pressures were driven by three factors. These include an increase in the number of students qualifying for higher education. The impact of the cost of living crisis, which made more households eligible for aid, and declining state resources.

She said the budget gap left some students unable to register. And these affected groups include university students who applied during the TVET cycle, students whose registration data was submitted after March 31 deadline, and students with approved appeals that cannot be funded — among others.

She said NSFAS is working with the Department of Higher Education and Training (DHET) and the National Treasury to prevent unfair exclusions.

Shortfall, not bailout

“It is important to stress that this is a shortfall, not a bailout,” she said.

She said the root problem was in the way NSFAS was designed. Their funding model promised more resources than available. And it did not accordingly adjust the eligibility criteria.

She confirmed that the new NSFAS Board had already approved the development of policies and strategies to govern eligibility and conditions for aid. These measures are expected to take effect from the next academic year.

No restrictions

“It is also not correct that NSFAS loans are restricted to undergraduate students. Postgraduate students, including those at NQF Level 8, are encouraged to apply. Similarly, funding is not limited to full-time contact students.

“Part-time and distance students at accredited institutions may also qualify. But this is provided that they meet the academic and financial criteria.

“By correcting these misconceptions and ensuring that prospective applicants understand the eligibility rules, NSFAS can improve uptake, expand opportunities, and deliver on the Comprehensive Student Funding Model’s promise of a fairer, more inclusive system,” said Stander.

She emphasised that NSFAS must also rebuild trust with students and the public.

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