Why NSFAS is always found wanting 

When the National Student Financial Aid Scheme (NSFAS) was founded in 1999 to assist students from underprivileged backgrounds access higher education, South Africa put education at the core of our country’s development agenda.  

Administered by the Department of Higher Education and Training and funded by the government as well as local and international donors, NSFAS has over the years supported hundreds of thousands of students, thereby changing their lives. 

While NSFAS has notched some achievements, the organisation regularly falls short of its objective due to ineffective leadership, maladministration and corruption, which harms the well-being of students and higher education industry in general. I’ll share a handful examples.  

I represent the Private Student Housing Association (PSHA), an organisation that provides more than 80 000 beds to tertiary students. While we support NSFAS’s mission to assist needy and deserving students in obtaining higher education in the best possible conditions, including quality housing, almost every year NSFAS drags its heels when it comes to paying the accommodation bill for students staying in residences run by some of our members. For instance, the new academic year is set to begin, but NSFAS has yet to pay for students’ accommodations from last year.  

Our organisation’s unpaid rental debt is R44-million, impeding our members’ operations. This debt also poses a risk of denying returning students with outstanding rental fees a place to stay. Allowing these students back into their rooms would be financially risky if NSFAS delays payment of arrears. 

We have given NSFAS a 14-day deadline to settle arrears. Failure to do so will result in the unfortunate eviction of students. 

Unfortunately, the problem of late payments has remained for years, despite the welcome dissolution of the NSFAS board in April last year and the appointment of an administrator. Instead of settling the debt, NSFAS ducks and dives. 

The organisation’s failure to announce the financing rate for students for the 2025 academic year timeously is another clear example of poor leadership. This information should have been communicated in the third quarter of last year to allow all affected parties ample time to prepare.  

Furthermore, the present financing rate of R50 000 per student is insufficient and below market rates for properties that meet the department’s minimum norms and standards of student accommodation.  

When the 2025 rate is finally released, we firmly believe that it should be tied to the market and should take into account real operational costs, which are currently far higher than the consumer price index.  

What’s more, a delay in publicising the rate increases the danger that NSFAS-funded students would be unable to secure their preferred housing because they cannot sign leases until they and accommodation providers know what the new rental allowance is. 

Thirdly, NSFAS’ inadequate leadership has caused misunderstanding among tertiary institutions, NSFAS and landlords on the grading and accreditation procedure for 2025.  

Residence accreditation ensures students of the quality of their lodgings and allows landlords who meet NSFAS criteria to accommodate students, as well as ensuring them a guaranteed payment process.  

Traditionally, this process was handled by the universities themselves but this responsibility was removed as NSFAS attempted to centralise accreditation, grading and payment. By NSFAS’s own admission, this has not been a success, yet they are persisting in rolling it out.  

Finally, NSFAS charges landlords a 5% administrative fee on each monthly invoice, which is excessive and not typical of electronic transaction fees, which are frequently less than 1%.  

The administration charge adds to financial burden of the landlords. Major commercial banks, who are already administering significant grant payments, have indicated their willingness to administer payments on behalf of NSFAS at little or no cost. So why is this excessive cost imposed? 

Finally, the application process for students seeking funding is fundamentally flawed as approvals are seldom made in time for the start of the academic year. The consequence is that prospective students arrive on campus and take up residence without knowing whether they are going to be funded. Typically, this is only finalised months later and, in many cases, even students with confirmed funding end up being defunded.  

The consequence for landlords is that they are forced to take in these students out of sympathy to ensure they are safe and have a roof over their heads. But this process imposes significant operating risk on them. 

Many may wonder why these issues aren’t addressed directly with NSFAS. That would be like hoping against hope. Despite the numerous engagements between PSHA and NSFAS in 2024, these only amounted to empty promises. Ignored calls and emails have made constructive communication with  
NSFAS near impossible.  

Yet PSHA is willing to work with NSFAS to find lasting solutions. 

• Mamabolo is the CEO of the Private Student Housing Association

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