The National Student Financial Aid Scheme has released payments for private student accommodation at universities, disbursing over R1.1 billion to benefit more than 100 000 students this quarter, even as the troubled institution operates under administration following governance collapse.
NSFAS confirmed on Monday that payments were released on Thursday, 7 May. Accommodation providers banking with First National Bank receive funds immediately upon release, whilst those using other banks may experience minor delays due to standard interbank processing timelines.
The scheme said 95% of accommodation providers listed on its solution partner portals have had their banking details successfully verified and are now included in direct payments for 2026. For the remaining providers, one-on-one engagements are being conducted to ensure full integration into the direct payment system.
NSFAS said it will issue a monthly disbursement schedule to all accredited accommodation providers. It urged providers to confirm students’ funding status and ensure valid, signed lease agreements are in place, as these remain prerequisites for payment.
Internal management of accommodation function
The scheme explained that it is legally mandated to manage accommodation payment functions internally from the start of 2026. This transition has helped resolve several critical issues, including delays in institutional confirmation of students which affected payment cycles, incorrect classification of some students as transport allowance recipients, and uncertainties regarding accommodation accreditation.
NSFAS acknowledged ongoing operational pressures faced by accommodation providers, including rising utility costs and municipal service challenges.
The scheme reaffirmed its commitment to working collaboratively with sector associations and solution partners to address outstanding issues, including finalising 2026 rental rates and implementing a more predictable and transparent payment system.
NSFAS said it remains committed to the prompt, case-by-case resolution of all payment challenges and encouraged accommodation providers experiencing difficulties to contact it directly for assistance.
The scheme expressed appreciation to accommodation providers for their ongoing partnership and assured all stakeholders of its focus on long-term stability, effective administration and the wellbeing of NSFAS funded students.
Operating under administration
The accommodation payments come as NSFAS operates under administration for the second time in eight years, following governance collapse marked by board resignations, a disclaimer audit outcome and systemic failures.
Higher Education and Training Minister Buti Manamela placed the R60 billion scheme under administration in early May, invoking sections 17A to 17D of the NSFAS Act, 1999, to appoint Hlengani Mathebula as administrator with a mandate to restore stability and accountability.
The intervention followed concerns about the legality of the NSFAS board’s constitution, multiple board resignations including that of the chairperson, and disputes related to governance processes and executive appointments.
The governance crisis was compounded by serious institutional challenges that emerged from NSFAS’s own reports and governance records.
The scheme received a disclaimer audit outcome for the 2024/25 financial year, the worst possible audit result, indicating the Auditor-General could not obtain sufficient evidence to form an opinion on the financial statements. The Auditor-General also identified material irregularities, pointing to fundamental breakdowns in financial management and compliance.
Further problems included weaknesses in consequence management, meaning officials responsible for failures or irregularities were not being held accountable, and serious data integrity problems that undermined the reliability of NSFAS records and decision-making.
Students bore the brunt of system deficiencies, with unresolved appeals caused substantially by system failures. Delays in ICT modernisation and systems integration hampered the scheme’s ability to process applications and payments efficiently.
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Student accommodation failures were cited as one of the key concerns affecting student dignity and safety, prompting the minister’s intervention.
Second administration since 2018
NSFAS was previously placed under administration from 2018 to 2022 after it was transformed overnight from a relatively small bursary scheme into a multibillion-rand grant scheme at the end of 2017 without adequate preparation.
Former president Jacob Zuma responded to the violent Fees Must Fall campaign during the ANC’s national conference in December 2017 by promising free higher education for the poor and working class.
At that time, NSFAS was a bursary scheme that awarded repayable loans with a total budget of about R10 billion. Since Zuma’s announcement, it has had to pay tuition fees, accommodation and monthly allowances to a rapidly growing number of students.
It soon became clear that information systems and available personnel could not cope with the expansion.
The scheme now serves about 1.2 million students with an annual budget that has grown to R60 billion.
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