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R700m spent on NSFAS admin could fund 9,000 students, Godongwana says
It was a comment that landed hard. At a post-Budget event, Finance Minister Enoch Godongwana did not mince his words. South Africa is spending R700 million just to administer the National Student Financial Aid Scheme, and in his view, the institution itself is not delivering value.
Not the bursaries. Not the students who rely on funding to enter lecture halls each year. The institution.
That R700 million, he pointed out, could cover tuition for around 9,000 students. In a country where access to education is often the only ladder out of poverty, that figure hits differently.
Paying others to do the job
At the centre of the controversy is a simple but uncomfortable fact. NSFAS has appointed three service providers to handle functions it was created to perform, including distributing funds to students and paying institutions.
Godongwana questioned why the state should keep an entity that outsources its core responsibilities while absorbing hundreds of millions in administration costs.
He framed it as part of a bigger fight. Cutting unproductive expenditure is easy to say. Politically, it is far harder to do. The minister acknowledged that many people feel emotionally attached to NSFAS, which has long been seen as a gateway to opportunity for working-class families.
But sentiment, he suggested, cannot justify inefficiency.
Social media backs the minister
The comments quickly gained traction beyond policy circles.
Michael Jordaan, former FNB CEO and co-founder of Bank Zero, publicly supported the minister’s stance. He argued that universities or banks could administer student funding and that redirecting the R700 million could immediately expand access to education.
On social media, the reaction has been divided. Some South Africans agree that public money must stretch further, especially in a strained economy. Others warn that dismantling NSFAS without a clear alternative could create chaos for vulnerable students.
A bigger education crisis
The NSFAS debate does not exist in isolation. It feeds into a deeper anxiety about South Africa’s higher education system.
The country has 19 public universities and 7 universities of technology, bringing the total number of state-owned institutions to 26. Access to tertiary education has expanded significantly over the years. Yet concerns about quality, governance, and relevance continue to surface.
Efficient Group chief economist Dawie Roodt has argued that South Africa should shut down many universities and replace them with technical colleges focused on practical skills.
His reasoning is blunt. The labour market demands specific expertise, while universities often produce graduates in fields where job opportunities are limited. He believes only a small share of the population should attend university and that institutions should concentrate on areas such as medicine, engineering, accounting, economics, and the hard sciences.
In his view, offering a wide range of degrees that do not match economic demand drains resources and leaves graduates unemployed.
Where this leaves students
For students and families, the conversation feels personal. NSFAS funding can mean the difference between studying and staying home. At the same time, taxpayers are asking tough questions about value for money.
Godongwana has made it clear that being Finance Minister does not require universal popularity. It requires stating facts as they are.
Whether NSFAS is reformed, restructured, or eventually replaced, one thing is certain. South Africa’s education funding model is under scrutiny like never before.
And as Treasury counts the rands, thousands of hopeful students are counting on a system that works.
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Source: Daily Investor
Featured Image: YFM
