NSFAS blames rising accommodation costs for its yearly budget shortfalls, while universities report that unpaid tuition fees are compounding the problem. Wits and UCT face similar pressures, with unpaid tuition and housing debts draining cash flow and saddling thousands of students with personal debt.
The National Student Financial Aid Scheme (NSFAS) is under immense budget pressure, affecting its ability to process funds it owes to universities. After recently appearing before the parliamentary higher education and training committee, NSFAS revealed an estimated shortfall of more than R15-billion, R10-billion of which is owed to universities.
Speaking outside NSFAS offices, CFO Waseem Carrim said the scheme now spent excessively on accommodation rather than its core mandate of funding needy, academically capable students. NSFAS capped accommodation fees in 2023, when the then minister introduced a policy to regulate charges by universities and private landlords because of concerns about overcharging in accommodation.
“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,” said Carrim.
On how things could change in the sector for housing, Carrim said, “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.”
Carrim said that because UCT had taken NSFAS to court, the issue had become a legal matter, making engagement outside the litigation process challenging.
NSFAS financial challenges vs universities
This follows a revelation by suspended NSFAS administrator Professor Hlangeni Mathebula that NSFAS owed universities R10.49-billion in tuition. With student allowances reportedly up to date, universities themselves faced substantial unpaid obligations from NSFAS.
NSFAS media liaison officer Anele Ntswayi said, “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...
“The shortfall is driven by a few factors, such as rising student accommodation costs, capped funding allocations and tuition increases. These factors have contributed to the current budget deficit… NSFAS has formal agreements with institutions outlining payment schedules. While we strive to meet these deadlines, operational challenges have led to delays, which we are actively addressing.”
When parliamentary committee chairperson Tebogo Letsie questioned NSFAS on where the shortfall problem lay, Mathebula told the committee that NSFAS owed universities and needed the Department of Higher Education and Training (DHET) to engage with National Treasury for assistance.
“There are universities where the amounts are so big. In Unisa, we’re talking about R405-million. Stellenbosch [University], I think it is close to R700-million… The entity doesn’t have the money,” said Mathebula.
Deputy Director-General of university education in the DHET, Prof Thandi Lewin, told Parliament that the matter was urgent. The department, with NSFAS, may ask National Treasury for an early drawdown of a later tranche, which is seemingly feasible but unprecedented, and currently under active discussion.
The University of Pretoria (UP) said NSFAS owed it R331-million for the seven months ending July 2026.
“The non-payment affects our cash flow, and we need to defer or reprioritise certain expenses. The shortfall relates to outstanding tuition fees; the R52,000 accommodation cap does not contribute to the payment shortfall from NSFAS… Any intervention would be welcomed,” said UP spokesperson Rikus Delport.
The University of the Witwatersrand’s director of communications Shirona Patel said, “The University can confirm that NSFAS owes Wits funds for the 2026 academic year. NSFAS pays allowances on a monthly basis. A large portion of the tuition component is currently outstanding, which does adversely affect the University’s cash flow and student debt balances.”
Speaking on the accommodation cap specifically, Patel said it “has an impact on student debt. The University continues to support students as far as resources allow. We try to source additional funds from the private sector, individuals and other sources, and more is always required. Last year, Wits disbursed R2.3-billion in student financial aid, scholarships and bursaries (including NSFAS) that assisted 29,781 students.”
Meanwhile, University of Cape Town spokesperson Elijah Moholola said, “As at August 2026, the University of Cape Town (UCT) had 3,269 NSFAS-funded students with fee debt arising from the shortfall between the NSFAS accommodation allocation and the cost of accommodation. For the 2026 academic year, the gross shortfall arising from the cap was forecast at R150-million.”
According to Moholola, UCT has allowed academically eligible NSFAS-funded students to register despite outstanding debt, provided they meet NSFAS academic progression requirements. “While this approach has helped students continue their studies, it has also contributed to a significant increase in student debt, placing growing pressure on the university’s financial sustainability,” said Moholola.
Responding to the court matter, Moholola said, “The university continues to engage NSFAS and the Department of Higher Education and Training directly on the funding shortfall arising from the accommodation cap. UCT does not wish to comment on the quantum, or on the options available to the university, while those engagements continue,” said Moholola.
Solving the crisis
Daily Maverick questioned Deputy Minister of Higher Education and Training Yusuf Cassim outside NSFAS offices during last week’s UCT student protest, on whether the present issues resonated with his and his predecessor Dr Mimmy Gondwe’s past comments on scrapping the scheme and paying universities directly through Treasury.
“We must try and decentralise as far as is possible to try and bring services and decisions closer to the people that are impacted. It’s a general principle, the principle of subsidiarity… I would attempt to persuade in the policy-making process and in the legislative review process that we take that route.
“It’s common cause that there are serious challenges. I think everybody can recognise that. It’s not only me that has recognised that. I’ve obviously been engaged to try and make an impact where I can to deal with the impact being felt by students. Let’s try and unblock the blockages,” Cassim responded.** DM**
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