08-05-2025
Mps demand accountability as nsfas struggles with payments, backlogs, and ICT failures
Members of Parliament described NSFAS as a disappointing institution, citing continual issues of non-payment and unnecessary spending.
The National Student Financial Aid Scheme (NSFAS) is battling to repair its information and communication technology (ICT) system. It was allocated R100-million for the repairs, and only R30-million is left, according to NSFAS.
The scheme's four solution partners responsible for managing student accommodation have delayed payments, resulting in financial complications for some landlords, some of whom have been forced to evict students.
Members of Parliament's committee on higher education have expressed concern and frustration. They described NSFAS as a disappointing institution after continual non-payment issues and unnecessary spending.
On Wednesday, 7 May 2025, NSFAS briefed the committee on student appeals, funding, allowances and accommodation matters. Newly appointed acting chief executive officer Waseem Carrim led the presentation, accompanied by new NSFAS board chairperson Dr Karen Stander.
More than R16-billion has been disbursed so far this year to universities and technical and vocational education and training (TVET) colleges for tuition fees, accommodation payments and allowances, NSFAS said. The scheme received more than 70,000 student appeals and had finalised 34,645. NSFAS has 5,533 appeals over outstanding documents, and will close 4,023 of these after a 30-day deadline.
In August 2024, NSFAS was battling to ease the backlog of student queries and appeals with a designated staff of between 80 and 86. This led to MPs raising concerns and calling for NSFAS to be decentralised.
Accommodation payments, landlord issues, student evictions
Members of the committee criticised NSFAS's use of four service providers who were meant to conduct the accreditation of properties whose owners had applied scheme's accommodation platform.
The committee heard that the service providers received a 5% commission from landlords for every NSFAS transaction. Committee member Sihle Lonzi (EFF) raised issues over student accommodation, referring specifically to the Walter Sisulu University student who died in a protest against housing conditions.
Lonzi asked why NSFAS used service providers to pay landlords, and said this should be scrapped. Carrim replied that 'the solution partners receive that fee for the utilisation of their online portal…We and the board find this contract to be problematic. While we may not have signed these laws, we are bound by them, which is why we would have instituted a legal review… the SIU (Special Investigating Unit) has also flagged this complex accommodation process for a review… we are stuck with this process.'
Committee member Sihle Ngubane (uMkhonto Wesizwe party) said, 'The institution is in tatters. It's disappointing and these things are made deliberately to be like this, from accommodation to tuition to transport to [the] ICT system, the whole value chain is a mess.'
Committee chairperson Tebogo Letsie (ANC) criticised NSFAS for its delays in payments to landlords, saying this had major implications for business owners. Letsie cited the example of a landlord from KwaZulu-Natal who had lost 80 beds due to NSFAS non-payment.
'NSFAS did not pay, and they tried to plead with banks, but the banks wanted their money. This lady then lost 80 beds that she had for about six years,' said Letsie.
Karabo Khakhau (DA) and Gaolatlhe Kgabo (ANC) questioned what caused the move to send funds to students, who then paid accommodation providers, which she said was a mistake.
Carrim replied, 'The payment made to students for accommodation was not an incorrect payment. Those are students who claimed accommodation, but were not linked to an accommodation provider, and therefore it was necessary. Those students would have slept on the streets if we did not pay that accommodation allowance.'
He said NSFAS had told the students that the disbursements had been for accommodation.
Carrim confirmed that more than 3,000 accommodation providers had been paid, representing 100,000 students, at a cost of R1-billion.
Missing middle funds
NSFAS has been capitalised with R3.5-billion over a three-year cycle from 2024-2027 to support students who fall into the 'missing middle' category of R350,000-R600,000 annual household income. This support was introduced by former higher education and training minister Blade Nzimande.
In this category, NSFAS received 65,812 loan applications, of which 2,268 were eligible, while 43,261 applications met the bursary criteria and were automatically funded, leaving 20,283 ineligible.
NSFAS offices
NSFAS spends more than R2-million a month on rent for its upscale Cape Town offices. There have been calls from MPs to relocate because of the cost.
Carrim said NSFAS was willing to leave the building, but there were contractual obligations. He said the SIU had also confirmed irregularities in the procurement process.
'The Special Tribunal will impose an equitable outcome; NSFAS cannot, at this stage, be certain of whether the cancellation penalties will form part of that,' said Carrim.
He said NSFAS was developing plans for relocation should the court rule for the immediate termination of the lease, so that business operations were not affected. Lonzi suggested that government buildings be used for NSFAS offices.
Carrim asked for six months to turn around the struggling scheme. DM
