Dissolve NSFAS and Rebuild Student Funding

The National Student Financial Aid Scheme (NSFAS) has been placed under administration again, and an IOL opinion piece argues the organisation should be dissolved and its funding functions transferred to government departments.

What has happened

Higher Education and Training Minister Buti Manamela placed NSFAS under administration and appointed Professor Hlengani Mathebula as administrator. The opinion notes this is the third time since 2018 that NSFAS has been placed under administration.

Previous administrators named in the piece are Dr Randall Carolissen, who served from August 2018 to December 2020, and Sithembiso Freeman Nomvalo, who served from April 2024 until February 2025.

Problems highlighted

The opinion lists a series of operational failures at NSFAS, including delays and disruptions in student payments and allowances, administrative backlogs, weak governance and concerns about inadequate financial control systems.

It cites the Auditor-General’s report that NSFAS received a disclaimer of audit opinion for the 2024/25 financial year and states that R45 billion was reportedly unaccounted for. The piece also refers to media reports that at least 12 000 students are experiencing food insecurity, hunger and homelessness because funding was halted during NSFAS “gap investigations”.

The scale and role of NSFAS

The opinion describes NSFAS as a R53 billion entity that provides financial support to more than 1.2 million students in South Africa. It quotes audited figures showing that in the 2021/22 financial year NSFAS disbursed more than R41 billion across the post‑school sector, with universities receiving more than R30 billion and TVET colleges more than R4 billion.

It also states that in the first quarter of 2026 NSFAS reportedly disbursed more than R6 billion to public universities and TVET colleges, and that at least 80% of funded beneficiaries in that quarter were first‑year students. The opinion emphasises NSFAS’s role in widening access and contributing to demographic transformation in higher education.

Author’s prescription

The opinion concludes that NSFAS is unsustainable and should be dissolved. It argues that disbursement of student funds should instead be managed jointly by the Department of Higher Education and Training (DHET) and National Treasury, which the piece says have the necessary institutional capacity, technical expertise and monitoring systems.

The author also calls for attention to the “missing middle” students with household incomes between R350 000 and R600 000 annually and for exploring alternative funding mechanisms, including a wealth tax targeting the top 1% to generate revenue for higher education funding.

Human consequences

The opinion warns that NSFAS’s instability harms student wellbeing, retention and throughput, and contributes to mental health challenges, hunger, food insecurity, homelessness and accommodation instability for students.

Final note

The piece presents these views as an argument for structural change in how South Africa funds higher education and for urgent action to protect students dependent on state financial support.