Unpaid NSFAS fees threaten student accommodation: a looming crisis ahead of 2025 academic year

Students protest at George Tabor College in Soweto on 17 September 2024 after NSFAS-funded students were allegedly turned away from their accommodation. (Photo: Fani Mahuntsi / Gallo Images)

By Takudzwa Pongweni

31 Jan 2025

With the start of the 2025 academic year just weeks away, South Africa’s National Student Financial Aid Scheme is under increasing pressure as unpaid rental fees, delayed funding decisions and a mounting accommodation crisis threaten to disrupt students’ access to higher education.

Ahead of the start of the 2025 tertiary academic year next month, student accommodation providers are raising alarms over unpaid rental bills.

The Private Student Housing Association (PSHA), which represents developers, institutional owners and operators managing more than 80,000 student beds nationwide, is calling on the National Student Financial Aid Scheme (NSFAS) to settle outstanding payments to avoid major disruptions.

NSFAS owes PSHA members R44-million in overdue rental fees. Without prompt payment, students could be denied access to their accommodation, threatening a smooth start to the academic year.

students nsfas backlog A protest at George Tabor College in Soweto on 17 September 2024 after NSFAS-funded students were allegedly turned away from their accommodation. (Photo: Fani Mahuntsi / Gallo Images)

While NSFAS has committed to providing accommodation support, delays in payments and insufficient capacity have led to increased pressure on both public and private accommodation providers.

The shortage of accredited accommodation, coupled with late payments, often forces students into precarious situations where they face eviction or forced reliance on private landlords who may not prioritise their safety or wellbeing.

For many students, particularly those from low-income backgrounds, this lack of support is not just an inconvenience, but a devastating obstacle to their education and future. One 22-year-old student who asked not to be named said she was unsure where she was going to get money from. She is from Qonce in the Eastern Cape and is studying at the University of the Witwatersrand.

“NSFAS does not care about our wellbeing, just about the money. They’re not concerned with our safety, and with the delays in payments we’ve been left to beg for longer stays, with no alternative solutions for how to pay rent.

“Half of university students come from poor backgrounds, and it’s sad to say the government doesn’t work hard enough to protect us, the children, who are trying to make a living out of education — education that is supposed to be the key to success,” she said.

NSFAS ‘unprepared for 2025’

PSHA CEO Kagisho Mamabolo told Daily Maverick that NSFAS was still unprepared for the 2025 academic year, highlighting that during last week’s meetings it had not yet provided the accommodation rate for 2025.

The current cap of R50,000 per student per year is inadequate, falling short of the market rental rates required for DHET-compliant properties, according to the PSHA. This rate is crucial for determining whether the services offered to students will improve or be downgraded, but NSFAS has not provided that clarity, said Mamabolo.

Mamabolo expressed concerns about the viability of the lease agreement provided by NSFAS. He highlighted several issues, including that there was no rate, making it impossible for providers to know what they were committing to, and the lease didn’t specify how providers should address situations where students lost their funding.

“In the lease, there are some clauses that suggest that we cannot sue NSFAS. If we cannot collect from that student, we must collect from NSFAS and we must be able to sue NSFAS,” he said.

NSFAS Administrator Freeman Nomvalo outlined plans to address the crisis, acknowledging that the situation was complicated and that NSFAS was actively working to resolve issues.

The delays in payments stem from inefficiencies in the flow of funds. Historically, NSFAS disbursed funds directly to students for accommodation, but reportedly not all students transferred the money to landlords, leading to significant arrears. A new pilot payment system, intended to streamline transactions directly to landlords, has not yet been fully implemented, leaving some providers outside the system, further delaying payments.

Daily Maverick sent questions to NSFAS about the ongoing accommodation crisis, but the scheme had not responded by the time of publication.

Brink of despair

NSFAS has long been plagued by inefficiency and corruption, severely hindering countless South African students from reaching their academic potential.

The scheme is meant to cover accommodation, living allowances, transport and learning materials. Unpaid accommodation fees and allowances have led to evictions, hunger and an inability to complete studies, ultimately blocking students from pursuing careers and improving their livelihoods.

“Kelly” is a second-year student at Wits University, whose experience with NSFAS has been marked by uncertainty and heartbreak. She asked not to be identified.

In 2024, Kelly’s NSFAS portal showed a “registration received” status, which led her to believe that she was fully funded for the year. She received her living allowance as expected, but her fees went unpaid even though her academic eligibility was confirmed. Wits sent her a monthly fee statement, but no payments were made. Her NSFAS portal still showed “registration received” for 2024, leading her to believe her situation was in order.

“I noticed in July after our semester break when my friends’ fees were being paid and mine wasn’t. I went to the fees office and they just told me that it’s normal and some people even owe from 2017. I also took this at their word and that was my mistake. You wouldn’t think they’d take advantage of poor kids like that,” Kelly said.

It wasn’t until the beginning of 2025 that she received a message from NSFAS requesting additional documentation, including her SARS ITA34 form, stating that her income had exceeded the NSFAS financial threshold of R350,000.

“In fact, I am technically defunded and was not informed of anything of the sort in 2024, even though I received allowances and I’m still on registration for 2024,” she said.

This oversight has left Kelly in debt to the tune of R168,000 with no clear way forward. Her mother has been unemployed since 2024 and Kelly is estranged from her father, leaving her in a difficult position in submitting the required documents.

“I was told I have to wait until I’m assessed and until the minister provides a way forward, especially for those of us with fees over R120,000. Some students with debts below R120,000 were able to sign sponsorship Acknowledgements of Debt and were cleared. Historical Acknowledgements of Debt are for us that owe over 120k, but we’re poor so how can we even pay that amount?”

For Kelly, the emotional toll has been heavy.

“Financially, my family really does not have anything. I’m the first generation in my family to attend university. I’m the oldest at home with younger sisters. Every day, I wake up with a heavy heart because I don’t even know how I’ll begin paying that money. Honestly, I feel like death is the only way I’ll free myself and my mother from this,” she said.

Delays deepen students’ struggles

Asive Dlanjwa, spokesperson for the South African Union of Students, told Daily Maverick that NSFAS had faced significant delays in responding to students, particularly those who had appealed against their funding decisions.

Many students were initially found to have exceeded the household threshold of R350,000, but this was often incorrect, prompting students to submit supplementary documents for reconsideration. Thousands are still waiting for responses to their appeals, which has been deeply frustrating.

Dlanjwa highlighted that the delays had been devastating, especially given the limited number of spaces available at universities, with some institutions able to admit only about 5% of their total applicants.

As a result, students who are still waiting for funding decisions have been unable to register and, in many cases, have been forced to forfeit their places. This, Dlanjwa explained, exacerbated the structural exclusion of students from working-class and poor backgrounds, perpetuating cycles of poverty by blocking access to higher education.

In addition, Dlanjwa pointed out that South Africa continued to face a student accommodation crisis. Many students still lacked access to safe and adequate housing that met the minimum standards necessary for their safety and academic success.

The situation is further complicated by NSFAS starting to pay for accommodation only in February, despite some universities beginning registration as early as January. This means many students have had to arrive at institutions without accommodation, leaving them vulnerable to a range of dangers, including muggings, assault and rape.

“It’s not a question of will NSFAS meet their obligations in terms of funding students in time for the beginning of the academic year, as much as it’s a question of they have not been able to because, as we sit right now, we are sitting with thousands of students that still have not been responded to, who are expected to register, the majority of whom will most certainly forfeit their spaces,” Dlanjwa said. DM

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South Africa

NSFAS ‘unprepared for 2025’

Brink of despair

Delays deepen students’ struggles