Thousands of students face uncertainty as NSFAS scrambles to settle R44 million accommodation debt

With just days remaining before the Private Student Housing Association’s (PSHA) ultimatum expires, the crisis threatens to upend 2025 academic year and leave thousands of students without a roof over their heads.

The PSHA, which provides critical housing to students across the country, has warned that its members can no longer sustain operations without payment. The organisation is concerned that unpaid accommodation fees could jeopardise the long-term viability of operating private accommodation businesses.

Worse still, if the debt remains unresolved by Monday, February 3, 2025, students dependent on NSFAS-funded housing could face eviction, throwing the already strained tertiary education sector into chaos. Many South African universities are already wrestling with shortage of placement for students.

A crisis years in the naking

The housing shortfall in South African universities is a persistent issue, compounded by NSFAS’s delays in funding disbursements. Many institutions lack adequate on-campus accommodation, forcing students to rely on private housing providers. However, these arrangements are on the verge of collapse, with the PSHA revealing that NSFAS’s failure to pay is not a new phenomenon.

“NSFAS recently informed all accommodation providers to consider housing students at their own cost for January, which is unfair to the accommodation providers since NSFAS does not pay student accommodation in December and January,” PSHA Chief Executive Officer Kagisho Mamabolo said.

NSFAS’s deflective response

NSFAS has responded by demanding “legitimate claims” from accommodation providers before settling any payments, a stance many critics describe as dismissive and inadequate. “NSFAS would like to remind all APs that payments of student accommodation will only be finalised on reccipt of legitimate accommodation claims,” the statement reads in part.

Yet, given the sheer size of the debt and the urgency of the situation, stakeholders are questioning why these issues were not resolved sooner.

The Outa (Organisation Undoing Tax Abuse) senior project manager, Rudie Heyneke, called NSFAS’s handling of private student accommodation a “time bomb.” He explains: “Outa has been warning since 2023 that Nsfas is sitting on a student accommodation time bomb, and this issue must be urgently addressed.”

He warned that unresolved debt and inefficiencies in NSFAS’s claims system could spark protests similar to those seen early 2024, which disrupted campuses nationwide.

The unknown awaits

As the deadline looms, the uncertainty is palpable. What will happen to the thousands of new students who have applied for NSFAS-funded accommodation for 2025 and are awaiting payments, as well as existing ones who rely on it for housing? Will they face homelessness and the loss of their education? And what of the private providers who can no longer afford to subsidize student accommodation without reimbursement?

Outa has called for an overhaul of NSFAS’s management of student housing, suggesting that universities and colleges take over these responsibilities in 2025. However, without immediate action, the damage may already be done.

The R44 million debt represents more than a financial crisis; it is a moral one. It is a crisis of trust in a system meant to uplift students from disadvantaged backgrounds. For now, the clock is ticking, and the futures of thousands of students remain in jeopardy.