PRETORIA, Gauteng — Higher Education and Training Minister Buti Manamela has announced a comprehensive NSFAS overhaul, stating that the National Student Financial Aid Scheme must be rebuilt from the ground up following severe governance failures. The call for a complete systemic redesign comes after Public Protector Kholeka Gcaleka uncovered prima facie evidence of systemic maladministration that has left thousands of students unable to access their qualifications.
The Public Protector’s findings have placed the student financier under mounting pressure, revealing that roughly 40,000 students were improperly funded, involving approximately 5.1 billion rand. Furthermore, recent audit reports identified that 800 deceased individuals were still erroneously receiving funds from the scheme.
Minister Manamela emphasized that accountability is a priority, noting that the current NSFAS board is actively collaborating with the Special Investigations Unit (SIU) to recover the 5.1 billion rand. A direct directive has also been issued to immediately address and rectify the irregular payments made to deceased beneficiaries.
The Minister highlighted that these systemic challenges have persisted despite previous interventions. At one point, 100 million rand was injected into NSFAS specifically to upgrade IT systems and digital data management, with the goal of ensuring accurate student payments. However, Manamela acknowledged that these measures were insufficient, likening them to a temporary fix on a deeply rooted problem, and stressed the need to return to “ground zero” to reimagine the institution.
A significant portion of the proposed overhaul will target the student accommodation crisis. NSFAS currently operates the largest student housing scheme in the country, accommodating over 100,000 students. This housing mandate consumes almost half of the scheme’s total 54 billion rand annual allocation. Manamela pointed to severe inefficiencies, including gap funding issues, students being wrongly allocated to incorrectly graded rooms, and exorbitant payments to outsourced solutions providers. Currently, outsourced NSFAS functions cost around 559 million rand, with student accommodation representing the largest single expense in the university and TVET college funding pipeline.
To ensure long-term sustainability, the Higher Education and Training department is exploring a “SARS-type” institutional model for the student financier. This proposed model would integrate advanced financial, technological, and means-testing capabilities. It would also introduce a structured, sliding-scale loan recovery system based on graduates’ future incomes, re-establishing the loan component of NSFAS for specific categories, such as the “missing middle.”
Minister Manamela candidly acknowledged that the current fee-free higher education model has become increasingly unaffordable, necessitating urgent internal government discussions on sustainable student funding. Under the current structure, a student receives approximately 5,400 rand for textbooks and around 1,800 rand for transport allowances if not residing in accredited accommodation, while maximum accommodation payments can reach up to 55,000 rand.
The push for systemic reconstruction aligns with recent public sentiment, where 71% of respondents in a recent broadcast poll favored completely rebuilding the system over merely demanding accountability or changing leadership.
While immediate interventions will focus on stabilizing the current system, fixing accommodation inefficiencies, and ensuring readiness for the 2027 application cycle, the projected rollout for the entirely new student funding model is slated for 2027 or 2028. Before finalizing the new framework, the department will engage in broad consultations with key stakeholders, including students, vice-chancellors, and college principals, ensuring that the primary voices in the South African education pipeline help shape the future of student financial aid.
