Students carry the cost of NSFAS funding cap, Parliament hears

The National Student Financial Aid Scheme (NSFAS) accommodation funding cap, introduced in 2023, has not been able to stop rising student housing prices, according to Minister of Higher Education and Training Buti Manamela. Instead, it has allegedly acted as a "price signal" for service providers to increase rents. This has led to students bearing the burden of the difference between the cap and actual rental fees, putting them into debt.

The cap varies depending on whether the accommodation is catered or not, and whether it is in a metro area. In metros, the annual cap for non-catered private accommodation is R52,000, while it is about R43,000 elsewhere. The committee heard that the accommodation cap has failed to keep prices low, leaving students saddled with the shortfall.

Many students live in buildings with poor quality, inadequate sanitation, and fire hazards. NSFAS CEO Waseem Carrim stated that the department does not have "rate-setting powers" and can't dictate what landlords charge. NSFAS senior manager for student accommodation Heena Valjee noted that accommodation funding grew by 50% between 2023 and 2026, and the department recommends reconceptualizing the cap and initiating an urgent investigation into accreditation and costing practices.