Inappropriate NSFAS Funding Costs Scheme Billions



An investigation into the National Student Financial Aid Scheme is beginning to yield results. The unit charged with investigating the bursary scheme found that thousands of students improperly received funding, costing the scheme billions of rands.



The Special Investigative Unit (SIU) says some students have been inappropriately funded by the National Student Financial Aid Scheme (NSFAS). It is believed that thousands of students did not meet the eligibility criteria but received funding from the financial aid scheme. 

NSFAS provides comprehensive funding which enables students from working-class homes to obtain a tertiary education qualification. To qualify for the comprehensive bursary, students must not have a household income exceeding R350,000 per annum. 

At least 40,000 students exceeded the NSFAS household income threshold and received funding to study. Students who improperly benefitted from NSFAS cost the financial aid scheme approximately R5 billion. 

The SIU explained that students who improperly benefitted from NSFAS did not submit their parents’ details when they applied for funding. This in turn meant the means test could not be properly conducted. 

SIU spokesperson Kaizer Kganyago said it was distributing that NSFAS paid around R5 billion to students who were not deserving of funding. 

They explained the unit mirrored the eligibility criteria against the applications that were received by NSFAS and found that more than 40,000 students did not qualify for funding, yet received the money. 

Kganyago cautioned that they cannot definitively say all these instances of students receiving funding are fraud. This is because the SIU intends to approach all these students in an effort to understand the circumstances that led to them receiving funding. 

Several circumstances may have led to students receiving funding. These include collusion between students and officials or students deliberately misleading NSFAS. There may also be cases where students have parents, however, do not receive any form of support from them and rely on the support of other relatives. 

We don't want to brush them [40,000 students] with the same brush, we want a situation where we interact with each and every one of the 40,000 students and understand their circumstances.

Kganyago says if fraud is detected by the SIU, it will be reported to the National Prosecuting Authority. Deliberate instances of fraud will require the SIU to recover the money. 

The SIU also identified scenarios in which students were funded because of overpayments, underpayments, unfunded students, double dipping and dropouts, and the involvement of syndicates in student accommodation.

Their findings further indicate that NSFAS has failed to design and implement controls which may have prevented students from improperly benefiting from the financial aid scheme. 

The SIU’s investigation shows that NSFAS failed to design and implement controls that would ensure that there is an annual reconciliation between the funds disbursed to the institutions and the funded list of registered students

Kganyago added that a lot of work must be done before their investigation can be completed. The investigation is expected to take 18 months to complete.

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