NSFAS under fire as 40,000 students improperly funded to the value of R5.1bn

An investigation by South Africa's Public Protector has revealed that around 40,000 students enrolled at 76 higher education institutions were improperly funded under the National Students Financial Aid Scheme (NSFAS), amounting to approximately R5.1 billion. The findings, cited in a Section 7(9) notice, detail systemic deficiencies across the administration, governance, funding, coordination, and oversight of student financial aid.

The investigation, conducted by the Special Investigating Unit (SIU) under Proclamation R88 of 2022, identified more than 40,000 students across the 76 institutions who had been improperly funded. The recoveries from these improper funds exceeded R2 billion. The Public Protector, Advocate Kholeka Gcaleka, stated that the evidence collected revealed a pattern of recurring administrative failures across the sector, including challenges in access to funding for tuition, inefficiencies in existing funding mechanisms, accommodation issues, and delays in funding disbursement.

Gcaleka noted that the problems were not isolated but reflected consistent issues affecting students and institutions. The SIU's investigation, which examined NSFAS, the Department of Higher Education and Training (DHET), and other relevant sector players, revealed that NSFAS had been plagued by governance instability, administrative weaknesses, and inadequate systems. These weaknesses have impeded the institution's ability to effectively fulfill its statutory mandate.

The investigation also highlighted recurring delays in funding decisions, appeal outcomes, and allowance payments, which had caused direct and foreseeable prejudice for students, including food insecurity and unstable accommodation. NSFAS's accessibility and communication with students were also found to be problematic, with 80% of queries received through its contact centre going unresolved due to escalation to internal units.

Despite receiving R3 billion in capitalization from the DHET over a three-year period (2024-2027) to support the "missing middle" category of students, NSFAS was unable to implement the funding due to the need for a new loan system. Additionally, the investigation found that progress in implementing recommendations from a 2022 Ministerial Task Team report on student funding policy had been inadequate, allowing systemic weaknesses to persist and continue prejudicing students.

The investigation also found that NSFAS's Close-Out Project, aimed at reconciling financial data between NSFAS and tertiary institutions, remained incomplete, contributing to prejudice for students whose qualifications remained withheld due to unresolved tuition accounts.