EFF member of parliament Sihle Lonzi is seething with anger over NSFAS’s apparent waste of R145-million paying useless intermediaries between the state entity and student accommodation providers.
The firebrand MP has written to NSFAS acting chief executive Waseem Carrim demanding answers as soon as possible.
In the letter, which we have seen, Lonzi says the money could have been directed to better use and benefit of the students.
Name and shame companies
He wants Carrim to name and shame the four companies that benefitted from the R145-million, from distributing R2.9-billion disbursed by NSFAS to private student accommodation providers in 2024.
“On 7 May 2025, [NSFAS] appeared before Parliament’s Portfolio Committee on Higher Education and Training.
“In that meeting, the EFF raised serious concerns regarding the irregular, wasteful, and potentially fraudulent expenditure by NSFAS on four private companies contracted to manage student accommodation services and landlord payments,” wrote Lonzi to Carrim.
R2.9-billion disbursed in 2024
“You confirmed on the record that these companies each charge 5% on all transactions facilitated between NSFAS and accommodation providers. Based on your own figures, NSFAS disbursed R2.9-billion in 2024 to private accommodation partners. Meaning that R145-million was siphoned off by these intermediaries for merely processing payments.
“Given that NSFAS spends over R14-billion on student accommodation, a figure that will undoubtedly grow, it is outrageous that hundreds of millions, if not billions of rands, could be diverted to a handful of companies without ethical and transparent processes or regulatory oversight.”
Lonzi continued that the situation was compounded by the fact that there was a crisis of defunded students. This included unresolved appeals, and widespread delays in disbursements to the most financially vulnerable young people in our country.
“Every rand paid to an unaccountable service provider is a rand taken away from a struggling student,” said Lonzi.
Not authorised to disburse funds
Lonzi said whistleblower reports have alleged that these intermediaries were never initially authorised to disburse funds to landlords. This is a responsibility that appears to have been assumed without formal and procedural amendment to their contractual mandates.
He said given the seriousness of the allegations, he was demanding from Carrim the following:
List of demands
- The full legal names of the four student accommodation solution providers contracted by NSFAS.
- Confirmation of whether these providers were originally contracted to disbursepayments to landlords. If not, which legal or procurement process was followed toauthorise this role?
- A copy of the full contract between NSFAS and each of the four (4) companies.
- The date of award and duration of each contract.
- The total amount paid to each provider from project inception to date.
- Confirmation of whether any of the four providers hold valid Financial ServicesProvider (FSP) licences.
- If any of the providers are not licensed, what legal or regulatory framework permitsthem to conduct financial transactions on behalf of NSFAS?
- To provide registration numbers for licensed Financial Service Providers and the categories of financial services they are authorised to perform.
