SIU recovers R1.7bn for NSFAS as universities and colleges pay back misused funds

A timely recovery as students return to campus

As thousands of students line up to register for the 2026 academic year, a significant chunk of long-missing student funding has quietly made its way back to where it was meant to be.

The Special Investigating Unit (SIU) has returned R1.7 billion to the National Student Financial Aid Scheme (NSFAS) after recovering money that had been sitting, in some cases for years at universities, TVET colleges and with students who did not qualify for funding.

The recovery forms part of more than R2 billion clawed back by the SIU so far, marking one of the largest clean-ups of student funding in recent years.

Where the money went missing

According to the SIU, the recovered funds date back to the 2016–2021 period, when money allocated to NSFAS students was not properly returned after students deregistered or moved institutions.

While higher education institutions are allowed to retain such funds for up to one year, many held onto the money far longer than permitted.

The SIU said the problem was worsened by weak internal controls and poor reconciliation systems within NSFAS at the time allowing unallocated funds to sit undetected for years.

In simple terms: money meant for deserving students slipped through the cracks.

Universities and colleges repay millions

The bulk of the recovered funds came from higher education institutions across the country.

Among the largest repayments were:

• University of the Witwatersrand – R450 million

• University of the Free State – R438 million, plus a second payment of R69.7 million

• University of Pretoria – R400 million

• University of Fort Hare – R277.6 million

TVET colleges also featured prominently, including Motheo, Majuba, Northlink, and Tshwane North TVET College, which paid back R15 million.

Even smaller institutions, such as Esayidi TVET College and West Coast College, returned funds underscoring the scale of the issue across the sector.

Unqualified students also paying back

Not all the money came from institutions.

The SIU confirmed it has recovered R126.4 million from 1,055 parents and unqualified NSFAS beneficiaries, all of whom signed acknowledgements of debt and agreed to repay the funds over time.

The unit has urged others who received NSFAS funding unlawfully to come forward voluntarily before legal steps are taken.

Fixing the system, not just the symptoms

The recovery has coincided with system changes at NSFAS, which the SIU has publicly welcomed.

Earlier this month, NSFAS announced it would implement a new, data-driven payment framework, including monthly occupancy and payment reports aimed at tightening accountability.

NSFAS is also considering moving to an in-house payment system, a move that could reduce reliance on third-party intermediaries and prevent future losses.

For students who’ve lived through years of payment delays, accommodation chaos and registration stress, the reforms signal a shift toward stability, at least on paper.

A broader clean-up continues

The SIU’s work falls under Proclamation R88 of 2022, which authorises it to investigate corruption and maladministration at NSFAS and recover losses suffered by the state.

Where evidence of criminal conduct is uncovered, cases are referred to the National Prosecuting Authority, with the SIU empowered to pursue civil action through the High Court or Special Tribunal.

NSFAS under pressure, but improving?

The recovery comes as NSFAS confirmed it has finalised all 2026 funding applications ahead of the academic year a first after years of delays.

According to NSFAS chairperson Dr Mugwena Maluleke, the scheme processed a record 893,847 applications, approving 609,653 and rejecting 49,538 after review.

Notably:

• 66.45% of applicants were women

• Over 520,000 applications came from SASSA beneficiaries

• More than 766,000 were first-time entry students

While more than 218,000 applications remain incomplete due to missing documents, NSFAS says the early processing reflects improved planning.

Why this matters beyond the numbers

On social media, reactions have been mixed, relief from students hoping the recovered funds will stabilise the system, and anger that the money sat unused while students struggled to register or secure accommodation.

The recovery doesn’t erase NSFAS’s troubled past, but it does mark a turning point.

For a funding scheme that supports hundreds of thousands of South Africa’s most vulnerable students, R1.7 billion returned isn’t just a financial correction, it’s a trust reset.

Whether that trust holds will depend on what happens next.