Billions lost as 40,000 students are improperly funded

Public protector Kholeka Gcaleka has found systemic deficiencies in the administration, governance, funding, co-ordination and oversight of the National Student Financial Aid Scheme (Nsfas).

Gcaleka made the finding during a media briefing on Tuesday on an investigation by her office into alleged maladministration at the scheme.

She said evidence gathered through the public protector’s own-initiative systemic investigation depicted Nsfas as an institution affected by persistent governance instability, administrative weaknesses and inadequate systems.

The investigation was also informed by subsequent developments, including findings reported by the Special Investigating Unit (SIU) to parliament’s standing committee on public accounts (Scopa).

“Of particular significance were the findings reported by the SIU to Scopa, indicating that more than 40,000 students in 76 higher-education institutions had been improperly funded to an estimated value of approximately R5.1bn, with recoveries exceeding R2bn.”

Gcaleka said evidence from her investigation showed that the instability at NSFAS had resulted in inefficiencies, including delays in funding confirmations, allowances and appeal applications, as well as delays in settling student tuition accounts. These problems had, in some cases, resulted in students having their qualifications withheld.

Independent reviews, including the 2021 ministerial committee of inquiry, also concluded that Nsfas had operated in a near-permanent state of crisis.

“These deficiencies have impaired its ability to discharge its statutory mandate effectively, efficiently and in a manner consistent with the standards expected of a public entity entrusted with public funds and vulnerable beneficiaries,” she said.

Gcaleka said students had experienced recurring delays in receiving funding decisions, appeal outcomes and allowances. These delays had caused direct prejudice, including food insecurity, accommodation instability and exposure to unsafe living conditions.

“Such outcomes demonstrate that Nsfas failures were not merely technical or internal, but materially affected students’ dignity, welfare and ability to participate in higher education,” she said.

These deficiencies have impaired its ability to discharge its statutory mandate effectively.—  Public protector Adv Kholeka Gcaleka

The investigation found that the scheme was difficult for beneficiaries to access. Gcaleka said the entity reported being unable to resolve 80% of queries received through its contact centre because they had to be escalated to internal units.

She noted that Nsfas had been placed under administration three times in the past eight years; in 2018, 2024 and 2026.

The report also found that delays in Nsfas’s Close-Out Project had caused substantial prejudice to students whose qualifications remained withheld because of unresolved accounts between the scheme and higher-education institutions. The project, which began in 2021, was intended to reconcile financial information between Nsfas and tertiary institutions.

Gcaleka recommended that higher education and training minister Buti Manamela ensure institutions reconsider debt-recovery methods so that graduates are not denied access to qualifications needed to become economically active. She said alternative mechanisms could include recovering outstanding debt once affected students become income earners.

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She made the same recommendation to vice-chancellors and principals of tertiary institutions.

They must also, within 100 calendar days, provide the public protector with a report on the implementation of the recommendations or provide just cause for any failure to implement them.

As part of the remedial action, Gcaleka said Manamela must, within 30 calendar days of receiving the final report, exercise the necessary oversight over Nsfas and establish a committee to ensure the expedited implementation of reforms contained in the reports of the ministerial task team chaired by Prof Xoliswa Mtose and the ministerial committee of inquiry chaired by Prof Yunus Ballim.

“By November 1 2026, in co-operation with the board of Nsfas, [the minister must] submit to the public protector an integrated plan on the commencement of the remedial actions and plan for the 2027 academic year among all the higher-education institutions,” Gcaleka said.

Vice-chancellors and principals must also conduct an audit of academic certificates being withheld and the reasons for withholding them. They must provide the public protector with statistical information on each affected student, including race, age, gender, amount owed and year of completion.

Meanwhile, the public protector has resolved to conduct a separate own-initiative systemic investigation into student accommodation.

Gcaleka said the decision followed concerns identified during the investigation and in loco inspections at sampled institutions. These included delays in the payment of accommodation allowances, weaknesses in the accreditation and verification of private accommodation, and the resulting risks of fraud, exploitation and student housing instability.