NSFAS is due a major overhaul, but consensus ends there

A scheme built to open the door to higher education has grown into the country’s largest social grant. Everyone agrees it can’t go on in its current form – but where to next?

Sioux McKenna is professor of higher education research at Rhodes University.

It’s unusual in South Africa’s fraught political context for there to be consensus on anything. But there is agreement that the National Student Financial Aid Scheme (NSFAS), the mechanism that has funded millions of students into universities and TVET colleges since the mid-1990s, needs to change. Where opinion splits is on what that change should look like.

When I made a suggestion in an interview on Newzroom Afrika that repayments should be managed by the SA Revenue Service (SARS) and should be on a sliding scale depending on income, it understandably landed with a thud online. South Africans face real challenges of unemployment and poverty and are furious about the entrenched corruption that has played out in the NSFAS debacle. And, while I stand by this particular recommendation, I recognise that the corruption in NSFAS has to be addressed before repayment at point of salary would be accepted by the public.

NSFAS enters the second half of 2026 under its third period of administration in eight years, after Minister of Higher Education and Training, Buti Manamela, dissolved its board amid governance failures. The Public Protector, Advocate Kholeka Gcaleka, has since found evidence of systemic maladministration , describing an entity that has operated in a “near-permanent state of crisis”. Her investigation cites failures in funding confirmations, allowances, appeals and tuition settlements.

The same process uncovered that more than 40,000 students were improperly funded, to the value of R5.1-billion , building on an earlier audit finding that more than 800 deceased beneficiaries were still receiving payouts, alongside payments where households were above the income threshold and students double-dipping with the SA Social Security Agency’s (Sassa’s) Social Relief of Distress (SRD) grant.

Parliament, meanwhile, has moved to summon four NSFAS intermediaries alleged to have earned roughly R559-million from outsourced payment and accreditation functions, particularly around student accommodation. The accommodation part of the grant has been a recurring problem, with NSFAS releasing R1.1-billion in overdue accommodation payments in May 2026 after providers went unpaid for months and students faced eviction.

To be fair, the minister inherited this nightmare and big improvements have been made since the current acting CEO was put in place. NSFAS concluded 2026 funding decisions pretty much on schedule , approved more than a million students, and rolled out a centralised accommodation database .

What has shifted the debate from “fix the administration” to “rethink the model” is the size of the problem. NSFAS will spend R54.3-billion in 2026/27 . This is more than the block grant that the government transfers to run the entire public university system.

It’s also larger than any other individual social grant available in SA.