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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.
TimesLIVE
29-04-2025
- Business
- TimesLIVE
Private accommodation providers worry over NSFAS nonpayment
Private accommodation providers accredited to house students through the National Student Financial Aid Scheme (NSFAS) have expressed 'deep concern and mounting frustration' over continued non-payments and sudden exclusion from the student housing system. The providers, primarily in Tshwane, say they have not been paid despite written agreements and have been blindsided by a decision to limit the Tshwane University of Technology's housing pilot to just 2,000 beds. 'On April 7, accommodation providers across most regions in the country experienced either no payment or partial payment, despite NSFAS' repeated public commitments to settle outstanding invoices by that date. 'Adding to our distress, on April 16, providers were blindsided by an email from NSFAS announcing a decision with TUT to limit the student housing pilot to only 2,000 beds at two selected residences, thereby excluding hundreds of other accredited providers who have been housing students since February 2024.' The providers said the NSFAS action amounted to a breach of contract and undermined trust in public-private partnerships. 'It is both unethical and unlawful to retroactively exclude providers who have already been fulfilling their responsibilities, based on NSFAS' prior written approvals and commitments. Is this not a breach of contract? Many of us signed formal offer letters and lease agreements that clearly confirmed we were to accommodate NSFAS-funded students,' they said. The group warned it could not continue operating beyond May 1 without urgent payments. 'Without payment, we cannot sustain these services, and the welfare and safety of thousands of students hang in the balance,' said the group. The providers called for immediate settlement of outstanding invoices, a halt to student relocations and clear, consistent communication from NSFAS. Nsfas said it issued a circular on April 7, reminding landlords of the April 17 accommodation payment deadline and the April 9 submission deadline. 'To prepare, NSFAS requested solution partners to provide lists of NSFAS-accredited student accommodation applications, subject to institutional eligibility verification. 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,' NSFAS spokesperson Ishmael Mnisi said. He said the verification process was ongoing for all the claims that were unpaid and feedback was provided to all landlords through its solution partners. Mnisi said NSFAS was not aware of any instruction directing students to vacate properties that had been previously approved and occupied by students since early 2024. Mnisi said students could be placed only in accommodation that has been officially approved by their institution. 'If an institution has not approved the placement of the student, NSFAS cannot pay the accommodation provider. Therefore, accommodation providers who have accommodated students without obtaining the institution's approval run the risk of nonpayment for the services rendered,' he said. Mnisi said the decision to limit the TUT pilot programme to 2,000 beds was informed by the projected student demand, which the university could not meet given the limited capacity of its own and leased accommodation. 'While the specifics of the decision-making process are internal, NSFAS acknowledges the impact on providers and any future adjustments or expansions of the programme will involve consultation with affected providers and stakeholders.' He urged landlords to refrain from evicting students while working collaboratively with the scheme to submit accommodation claims. 'There will be a top-up payment in May for landlords who may not have received payment during the April run,' said Mnisi.
