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IOL News
6 days ago
- Business
- IOL News
NSFAS under legal review: enhancing student accommodation management and third-party partnerships
South Africa is experiencing a surge in demand for built student accommodation, with a significant shortfall of over 500 000 beds needing to be addressed in the sector. Image: Paballo Thekiso The National Student Financial Aid Scheme's student accommodation management processes and the involvement of third-party partners are currently under a comprehensive legal review. The student financier said it is currently awaiting the outcome of this review and will implement the recommendations to enhance transparency, integrity, and efficiency in its payment processes. 'NSFAS remains dedicated to supporting students and ensuring the timely and accurate disbursement of funds. We appreciate the cooperation of all stakeholders and remain committed to resolving these matters swiftly.' In a statement intended to provide clarity on the current status of payments related to student accommodation, NSFAS said it wished to reaffirm that payments for accommodation are made exclusively for claims that have undergone and satisfied all validation and verification procedures. It said the non-payment may result from claims involving students who are not funded, claims lacking confirmation from relevant institutions, or cases where registration data was not received before the payment deadline. 'NSFAS remains committed to safeguarding students from adverse outcomes, including eviction and safety risks, and continues to collaborate closely with institutions to resolve these issues swiftly and effectively.' The entity said, "It does not confirm owing R62 million in arrears from January 2024 to July 2025." "The Private Housing Student Association (PHSA) is an association representing landlords. NSFAS directly processes payments to individual landlords and does not make payments to associations. Furthermore, PHSA has not furnished a detailed breakdown of the claims they allege to be outstanding.' Last month, Kagisho Mamabolo, the CEO of PHSA, said thousands of students continued to face uncertainty due to delayed NSFAS accommodation payments and the absence of a sustainable student housing funding model. 'Many private accommodation providers-who account for the majority of available beds-are at financial risk, compromising stability and continuity of services,' Mamabolo said then. The Association said inconsistencies in accreditation frameworks, misaligned university policies, and punitive 5% NSFAS levies imposed by third-party intermediaries have created confusion and additional costs for both students and housing providers. According to NSFAS, a total of R744,406,752 was paid to landlords during the April period in an effort to settle outstanding claims and reduce arrears. NSFAS said it affirms that it has not exhausted its funding for paying landlords. It said payments are made strictly based on validated claims for students who are funded. It said delays in payments can occur due to several factors, including: Students residing in accredited properties but not yet funded Students onboarded at institutions not participating in the pilot program Invoice discrepancies or errors Students qualifying for transport allowances but residing in accredited accommodation Properties are inaccurately accredited with high grades despite not meeting minimum norms and standards Challenges related to the registration data upload portal, which was temporarily closed due to funding constraints. This has resulted in some students facing eviction, as landlords deny re-entry owing to unpaid dues. NSFAS said that it, along with partner institutions, is actively engaging to communicate and address these issues, which have caused hardship for affected students. Independent Media Property
Daily Maverick
05-08-2025
- Business
- Daily Maverick
Landlords threaten legal action as NSFAS fails to pay R62m in student accommodation fees
The National Student Financial Aid Scheme (NSFAS) has left private accommodation providers in crisis after not paying R62-million in rent, which in some cases dates back to January 2024, causing landlords to default on municipal bills and delay staff salaries, increasing the risk of student evictions. The NSFAS has once again found itself in financial trouble with private accommodation providers after landlords claimed they are owed R62-million in unpaid accommodation fees dating back from January 2024. According to the landlords, this affects 2,797 beds across a wide range of universities and Technical and Vocational Education and Training colleges. Earlier this year, Daily Maverick reported that the Private Student Housing Association (PSHA), which represents developers, institutional owners, and operators managing more than 80,000 student beds nationwide, said members were owed R44-million in overdue rental fees; this has now increased to R62-million. PSHA CEO Kagisho Mamabolo told Daily Maverick that the delays in NSFAS accommodation payments stemmed from a combination of systemic inefficiencies, including unresolved validations, data mismatches and institutional delays in uploading accommodation confirmations. 'The impact has been financially devastating for many providers, particularly small and black-owned operators who lack access to working capital. Delayed payments have hindered maintenance, security, and student support services. Landlords are defaulting on municipal bills, mortgages or staff salaries. Several members have signalled possible closure, and new developments in the sector have been stalled or cancelled,' said Mamabolo. He added that on 28 July 2025, PSHA held a formal consultation and reconciliation meeting with a NSFAS team, led by the acting senior manager for student accommodation, Sivuyile Tshiwula. Mamabolo said NSFAS would begin a validation process of the arrears, and that they would give NSFAS until the end of the month to process the outstanding arrears. 'Should NSFAS fail to meet its obligation to validate and settle verified arrears within 30 calendar days, as committed in the 28 July 2025 consultation, PSHA will instruct legal counsel to initiate litigation proceedings and apply to attach NSFAS assets and bank accounts to recover the debts owed to our members. This action will be taken to protect the financial sustainability of housing providers and the continued accommodation of thousands of NSFAS-funded students across the country,' said Mamabolo. Lack of communication Daily Maverick spoke to the landlords who own Urban Circle, a private accommodation that houses students from the University of Johannesburg and the University of the Witwatersrand. Saul Mayers and Rowan Lewis said that the arrears owed from 2024 were approximately R14.2-million. One of their buildings, Drivelines, had a monthly rent of R745,000. 'In instances where University of Johannesburg and Wits distribute the money, we get paid. So in the instance where NSFAS has to distribute the money, we're getting no funds. I've got 134 students in a specific building who are University of Johannesburg NSFAS students. And University of Johannesburg cannot allocate the money for them; it has to come directly from NSFAS, and it's just not being paid,' said Lewis. Mayers added: 'Since there's a new board of directors at NSFAS, they have been sending emails and official communications confirming that 2024 arrears will be paid by a certain date, and now they have stopped sending notices, and we haven't received any of the 2024 arrears.' Mamabolo told Daily Maverick that no formal student evictions had been reported, but the risk was increasing. Without urgent intervention, student accommodation in some areas may become severely constrained. NSFAS's 5% commission system In May 2025, MPs grilled NSFAS over the use of four service providers who were meant to conduct the accreditation of properties whose owners had applied to the scheme's accommodation platform. The service providers received a 5% commission from landlords for every NSFAS transaction. Mamabolo said this reduced the net income received by landlords. NSFAS mandates property registration (names, locations, images) for student housing. It then accredits and grades properties. Frustration arises from intermediaries charging landlords 5% of NSFAS payments. 'This model has caused delays in payment processing, confusion over disbursement timelines, and reduced financial viability for providers already operating under capped rental limits. The Private Student Housing Association strongly opposes this model and continues to advocate for direct landlord payments, coupled with rigorous compliance monitoring,' said Mamabolo. Daily Maverick sent questions to NSFAS spokesperson Ishmael Mnisi and CEO Waseem Carrim on 31 July 2025, regarding the non-payment of landlords and the effect this would have on students. Daily Maverick followed up with the pair on 4 August.
Daily Maverick
01-05-2025
- Business
- Daily Maverick
NSFAS fails to pay accommodation rent, opening window for landlords to evict students
With the National Student Financial Aid Scheme repeatedly missing accommodation payments, landlords burdened by unpaid bills are evicting students, leaving many stranded during critical exams. Some accommodation providers have begun evicting students after the National Student Financial Aid Scheme (NSFAS) failed to pay rent for months. Since the start of 2025, NSFAS has delayed making payments a number of times, pushing landlords to their limits. In March 2025, while under pressure, the scheme brought its payment date forward from 4 April to 31 March 2025, but many providers still haven't been paid. NSFAS pleaded with accommodation providers not to remove students, but for many, patience has run out. Kagisho Mamabolo, CEO of the Private Student Housing Association (PSHA), which represents developers and operators managing more than 80,000 student beds nationwide, told Daily Maverick that, as of 3 April, NSFAS still owed landlords R27-million in payments related to 2024. That amount had since increased owing to delayed payments from 2025. The new arrears have largely been attributed to NSFAS's new payment system, which involves using outside service providers – what it refers to as 'solution partners' – to check whether accommodation options are accredited. Mamabolo said landlords have to wait for these solutions partners to get their money and this is where the delay occurs. In an SABC interview on 27 April, Mamabolo said the majority of the accommodation providers have not been paid on time. 'With the NSFAS situation, if you are paid today as a landlord, you are not guaranteed next month you're going to be paid. So we are in a situation where we chase our payments month after month, and we don't think NSFAS will resolve it this year,' Mamabolo said. Mamabolo also told Daily Maverick that the matter of NSFAS paying money to students from TVET colleges to pay the landlord is a breach of contract. Earlier in April, students were paid R13,800, meant for allowances, but after some time NSFAS communicated that students must pay R10,800 to landlords. 'NSFAS has violated its own lease agreement with landlords. There is nowhere in the lease agreement that the tenant should pay. We are asking NSFAS how practical is this, because it is not the tenant who is violating the lease agreement, it is the funder who failed to pay rent,' Mamabolo said. Students' ordeal Daily Maverick spoke to NSFAS-funded students from Nelson Mandela University (NMU) and the Tshwane University of Technology (TUT) who were kicked out of their accommodations. One NMU student, who asked to remain anonymous, said: 'We received a message from a group saying NSFAS did not pay for the two previous months and they said they will evict us because they could not sustain us. I and a few were kicked out even though some students stayed. 'This has affected me immensely. I found a student that I am now living with, but I am close to writing my examination and I worry because how am I going to study without a place to stay? This has really affected me because I have no relatives in Port Elizabeth [Gqeberha].' Another third-year NMU student faced eviction after their landlord demanded they leave due to non-payment by NSFAS. 'We left the residence and students from EFF were contacted to come and assist us by liaising with the institution. We ended up staying at the residence,' the student said. In Nelson Mandela Bay, The Herald recently reported that landlords are threatening to evict hundreds of students over three months of unpaid rent from NSFAS. In Tshwane, a TUT student, who also wanted to remain anonymous, described her ordeal. She said her landlords told her to pay R10,000 if she wanted to stay because NSFAS had not paid yet. 'The contract I had with the landlord said if NSFAS failed to pay within the first month, they are supposed to evict me, but they did not. We then waited for NSFAS and the rent money accumulated. Later, they told me I have to move out because NSFAS hasn't paid… 'I was under a lot of pressure and panicking… The landlord said I have to pay the R10,000 or stay and the money will accumulate, so I moved out,' said the student. A Tshwane accommodation provider, who wanted to remain anonymous fearing victimisation from NSFAS, told Daily Maverick that NSFAS blindsided accredited private providers by limiting TUT housing options to two residences with a total of 2,000 beds, excluding hundreds of accommodation providers who have housed students since February 2024. 'The situation is very dire. A lot of our accommodation providers are owed monies from last year and NSFAS said they cannot accredit these people because they did not follow a process, yet we got offer letters from NSFAS through solution partners to accommodate students… 'There is electricity, WiFi, transport services, caretakers, maintenance – we can't carry housing students anymore to the next month without payments because now we don't have money. Our properties are getting deregistered by the bank and they're getting repossessed,' said the accommodation provider. NSFAS response NSFAS spokesperson Ishmael Mnisi told Daily Maverick that the scheme acknowledges the delays but insists that verification is necessary and payments will be made. 'We deeply value the role that accommodation providers play in supporting our students… The verification process is inherently complex, involving multiple checks to ensure compliance with NSFAS and government regulations. 'This process is meant to ensure that NSFAS does not pay ghost students, who are neither funded by NSFAS nor enrolled in any public university or college. The verification process is currently ongoing for all the claims that are currently unpaid and feedback is provided to all landlords through our solution partners,' said Mnisi. Mnisi explained to Daily Maverick that TUT was designed to serve a specific need with a defined capacity, and the decision to limit accommodation funding to 2,000 beds was based on anticipated student demand. 'NSFAS will not make a decision to 'cut off' accommodation without clear communication and agreement with the institution involved, particularly when such accommodation is still necessary. 'The principles of supply and demand are also applicable in this context. If there are any legitimate students from the University of Tshwane who are currently without accommodation, we encourage them to consult the university immediately for further assistance,' said Mnisi. DM
