South Africa’s National Student Financial Aid Scheme (Nsfas) is facing renewed scrutiny after investigators revealed that more than R5 billion may have been allocated to students who did not qualify for financial assistance, raising fresh concerns about oversight, accountability and the long-term sustainability of the country’s largest higher education funding programme.
The findings, presented by the Special Investigating Unit (SIU) to Parliament’s Standing Committee on Public Accounts (Scopa), suggest that thousands of beneficiaries exceeded the household income threshold of R350,000 but nevertheless received funding because income verification processes were incomplete or improperly conducted.
The investigation comes as separate audits and growing criticism from economists, student organisations and lawmakers continue to expose weaknesses within the system.
Funding oversight under renewed scrutiny
According to the SIU, many applicants failed to provide their parents’ financial information during the application process, preventing proper means testing and allowing ineligible students to receive financial support.
The Auditor-General (AG), in its regulatory audit for the 2024-25 financial year, also identified around 14,000 students who may not have satisfied the required financial eligibility criteria. These findings are separate from the SIU investigation.
Earlier reports submitted to Parliament showed that 21.6% of students funded at universities and Technical and Vocational Education and Training (TVET) colleges did not meet the required academic progression standards. Despite this, many continued receiving government funding.
The audit also uncovered another anomaly, with 822 deceased students still listed as active beneficiaries and continuing to receive financial assistance.
Investigators from the Organisation Undoing Tax Abuse (OUTA) say students who improperly received funding because their household income exceeded the eligibility threshold could be required to repay the money. Recovery efforts are already underway, with both the SIU and debt collection agencies working to recover outstanding funds, including historical debts dating back to before 2018 when Nsfas operated primarily as a loan scheme.
Although estimates have suggested that Nsfas faces a financial shortfall approaching R50 billion, investigators caution that no official figure has yet been confirmed.
Calls grow for structural reform
Beyond financial irregularities, the student funding scheme is also facing criticism over delayed allowances, administrative failures and allegations of corruption.
Economist Dawie Roodt argued that South Africa should reconsider the scale of university enrolment, saying greater investment is needed in primary education and vocational training rather than expanding traditional university education. He suggested that funding should prioritise students pursuing scarce and critical skills needed by the economy.
Meanwhile, Higher Education and Training Deputy Minister Yusuf Cassim said government interventions have already restored funding for thousands of affected students.
Following recent engagements with universities and the Nsfas administration, accommodation allowances have been approved for more than 1,100 students at the Central University of Technology who were previously excluded because they lived in unaccredited residences.
Cassim also confirmed that 374 students at Nelson Mandela University affected by qualification code updates will receive payments in August after being reinstated in the current funding cycle. At the University of South Africa (Unisa), funding has already been restored for 1,706 students, while several hundred additional cases remain under review.
Student organisations, however, argue that thousands continue to suffer from delayed payments.
The Mayibuye Youth Movement claims more than 32,000 students have yet to receive meal allowances, with between 10,000 and 15,000 students reportedly losing funding, most of them first-year students.
The organisation alleges that corruption networks have diverted funds intended for vulnerable students, leaving many unable to pay for accommodation or basic living expenses. It has called for a commission of inquiry into the management of Nsfas and urged government to establish dedicated Nsfas offices on university campuses to improve service delivery.
As investigations continue, the controversy has intensified debate over how South Africa should fund higher education while ensuring public money reaches students who genuinely qualify for assistance.
Source: The Citizen, SIU, Auditor-General, Parliament of South Africa