The National Student Financial Aid Scheme (NSFAS) has come under fire after reports revealed R60 billion in irregular expenditure over the past four years. This alarming figure was revealed during the presentation of NSFAS’ 2024 annual report to Parliament’s Portfolio Committee on Higher Education.
Irregular Expenditure Under Investigation
Chairperson Tebogo Letsie described NSFAS as "too big to fail" but expressed concern over its financial mismanagement. The Auditor-General's report highlighted multiple causes of irregular expenditure.
They estimated that NSFAS racked up R60 Billion in irregular expenditure over the last four years. According to the report, the lack of clarity in the NSFAS eligibility criteria led to significant irregular expenditure in 2019/2020.
The appointment of the NSFAS allowance direct payment system providers, which the scheme has since abandoned, also contributed to irregular expenditure in 2022/2024.
The contention NSFAS Cape Town Headquarters Lease also counted against the scheme.
The committee criticised NSFAS for submitting its 2022/2023 annual report more than a year late, citing the dissolution of the board as a primary reason for the delay.
Accountability Remains a Concern
Chairperson Letsie underscored the importance of accountability, warning that NSFAS' financial mismanagement could jeopardise future student funding.
Without proper accountability, it becomes difficult for Parliament to allocate funds
He added that irregular expenditure could lead to deserving students being denied funding while billions are wasted.
NSFAS currently receives an annual budget of R50 billion to support students from poor and working-class backgrounds. These funds are critical for enabling access to tertiary education for those who cannot afford it.
NSFAS Under New Leadership
In April 2024, former Higher Education Minister Blade Nzimande dissolved the NSFAS board and placed the scheme under administration. Freeman Nomvalo was appointed as the Administrator to address ongoing challenges.
Current Higher Education Minister Nobuhle Nkabane has since announced that the appointment of a new NSFAS board is imminent.
Preparations for 2025 Academic Year
Despite these setbacks, the Portfolio Committee on Higher Education expressed optimism about the 2025 academic year. Stakeholders assured the committee that systems are in place to support returning and first-year students.
NSFAS plans to release R3.7 billion in upfront payments to universities by January 2024 to ensure timely disbursement of allowances. An additional R641 million—20% of TVET colleges’ tuition allocations—will be distributed by 10 January 2025.
As NSFAS moves forward under new leadership, all eyes will be on its ability to restore financial accountability while maintaining critical support for students nationwide.
