STUDENT FUNDS: NSFAS’ R10bn hole — housing costs blamed as universities left in the lurch

South Africa’s student funding scheme says its budget crisis has grown so severe that accommodation now costs it more than tuition. The National Student Financial Aid Scheme, or NSFAS, estimates its total shortfall at more than R15 billion, with about R10 billion owed to universities.

NSFAS Chief Financial Officer Waseem Carrim said the scheme’s spending had moved away from its original purpose of supporting needy students with academic potential. “What we’re seeing in our data now is that we’re providing almost 95% of university students with accommodation. I don’t think that was the intention. In fact, NSFAS is spending more money now on accommodation than we spend on tuition costs. It almost feels like our mission has drifted away from just being a funder of human capital development,” he said.

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What we’re seeing in our data now is that we’re providing almost 95% of university students with accommodation. I don’t think that was the intention. In fact, NSFAS is spending more money now on accommodation than we spend on tuition costs. It almost feels like our mission has drifted away from just being a funder of human capital development.

The scheme capped accommodation fees in 2023 after concerns that universities and private landlords were overcharging students. Carrim said a possible compromise would retain limits on NSFAS accommodation payments while allowing wealthier universities to absorb part of the cost, without passing it on to students.

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I think the middle ground lies somewhere between us not having an uncapped student accommodation amount, but the wealthier universities being able to subsidise some of the costs associated with accommodation. More importantly, these costs are not passed down to the students.

The unpaid bills are adding to pressure on universities. Suspended NSFAS administrator Professor Hlangeni Mathebula previously told lawmakers that the scheme owed institutions R10.49 billion in tuition, while student allowances were reportedly up to date. NSFAS media liaison officer Anele Ntswayi said the organization was reconciling accounts with affected institutions. She attributed the deficit to rising accommodation costs, capped funding allocations and tuition increases, while acknowledging delays against agreed payment schedules.

Carrim also said legal action by the University of Cape Town had made discussion outside the litigation process more difficult. The dispute leaves universities dealing with unpaid fees while NSFAS reviews whether accommodation spending has overtaken its central funding role.

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NSFAS acknowledges outstanding payments to several institutions. While we cannot disclose institution-specific figures due to confidentiality, we confirm that we are reconciling with all affected universities.