At the start of the year, the National Student Financial Aid Scheme (NSFAS) announced that it would be capping student accommodation allowances for funded students at R45 000 per annum.
However, concerns were raised as several stakeholders, including universities and students, did not support the cap and have questioned why the bursary scheme initially implemented it.
Out of the 26 universities, a total of 11 indicated that the cap would negatively impact them, of which five were affected more than the rest.
During a recent Higher education committee meeting NSFAS gave an update on the student accommodation cap and related matters on student allowances.
According to the bursary scheme, when determining the cap of R45,000, it examined existing various data for accommodation claimed historically across all institutions as well as recommendations from the Ministerial Task Team report and available market data which looked at the generic student housing market.
NSFAS further noted that the cap was also introduced after it was discovered that there had been price fixing and in some instances, collusion from university staff for exorbitant fees at tertiary accommodation.
Service providers charged students exorbitant amounts for small rooms. The cap allows the government to stretch its limited resources to support more students who do not have access to funding for student accommodation.
NSFAS CEO, Andile Nongogo says that some providers came in with offers as high as R100 000 per annum for a student.
In addition to examining data, NSFAS also ran a three-day workshop in Bloemfontein, which tested issues on student accommodation and probed what cap would be acceptable to the market. NSFAS also assessed research conducted by the International Finance Corporation on the landscape of student accommodation in South Africa.
Today, we can conclude that the R45 000 cap was not generated from a thumb suck but through an evidence-based process. One might argue that this evidence was inadequate but credible research by banking institutions that consider the local market and other available data has been considered.
Furthermore, to assist institutions negatively affected by the cap, NSFAS has engaged with the institutions involved in trying to find solutions for funded students that could not be placed because of the cap.
The bursary scheme also acknowledged that given that the cap was implemented for the first time, more work needed to be done to determine the relevant variables in line with the minimum norms and standards for student accommodation, and to determine the grading that would enable amounts to be paid by NSFAS above the cap.
