05-08-2025
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.
