South Africa’s student funding system is under intense scrutiny following shocking findings by the Auditor-General of South Africa (AGSA) and the Ministry of Higher Education and Training. The 2024/25 NSFAS audit revealed over 800 deceased beneficiaries continuing to receive funding, thousands of students whose household incomes exceed eligibility thresholds, and multiple cases of double-dipping with Social Relief of Distress grants.
At the same time, the human cost of these failures continues to mount, with many students still caught in crises linked to delayed payments and housing instability, as highlighted in our analysis of how NSFAS payment delays leave students homeless during exams.
Earlier this year, 1 million students were approved for NSFAS funding in 2026, yet thousands remain uncertain as NSFAS scrambles to settle R44 million in outstanding accommodation payments.
This aligns with broader concerns raised in SIU efforts to recover billions in NSFAS funds, highlighting a pattern of weak oversight, systemic loopholes, and financial leakage.
Ministry of Higher Education responds
The Ministry of Higher Education recently addressed the findings, emphasising the seriousness of the audit results in a statement to eNCA.
Deputy Minister Dr Nomusa Dube-Ncube highlighted that the audit identified nine material irregularities, four of which are newly flagged, and stressed that NSFAS must institute forensic investigations not only into accommodation service providers but also into staff members responsible for oversight failures.
“The issue is so disappointing that, while NSFAS might have lost previous verification contracts with Home Affairs and SARS, this does not excuse the inability to verify students’ income or eligibility,” Dr Dube-Ncube said. She added that ensuring proper verification is critical to protect funds for deserving students.
Ministerial intervention: decisive action
Following a joint meeting with the NSFAS Board, its Acting CEO, and the Auditor-General, Higher Education Minister Buti Manamela, together with Deputy Ministers Mimmy Gondwe and Nomusa Dube-Ncube, issued a formal directive to the NSFAS Board. The directive orders the activation of NSFAS’s forensic unit to work with the Special Investigating Unit (SIU) on flagged cases and ensure all instances of fraud or misrepresentation are referred to the proper authorities.
For official updates on corrective measures, see the Minister of Higher Education and Training’s joint directive to NSFAS.
“NSFAS is not beyond repair. It is an institution that carries a mandate of enormous national importance to ensure that poverty is not a barrier to education,” Minister Manamela said. “We are committed to NSFAS. We are committed to the students. And we are committed to building an institution that can be trusted.”
Shocking audit findings
NSFAS received a disclaimer of opinion for the 2024/25 financial year, the worst possible audit outcome, highlighting missing records, weak controls, and a breakdown in basic financial management. Nine material irregularities were flagged, including four new cases, and data analytics revealed:
- 822 deceased students were still receiving bursaries
- Over 14,000 students funded despite exceeding income thresholds
- 321 students receiving both NSFAS and Social Relief of Distress grants
- Tens of thousands with prior qualifications or failing academic progression rules still funded
“These leaks mean that money intended for poor and working-class students has been diverted – whether through system failures, misrepresentation, or outright fraud,” the Minister said.
Student accommodation crisis
The audit also revealed unsafe and substandard housing conditions, with students housed near taverns, stranded without transport, or having their belongings confiscated due to delayed payments. Minister Manamela has ordered an urgent audit of all accredited accommodation providers and the suspension of any that fail to meet contract standards.
“The human cost of NSFAS failures is unacceptable,” the Minister said. “Students deserve safe and decent accommodation, not to struggle for survival while trying to study.”
Progress and accountability
Despite these challenges, NSFAS has recorded some improvements:
- Clearing the backlog of late financial submissions
- Meeting all PFMA reporting deadlines for 2025/26
- Four material irregularities at a stage satisfactory to the Auditor-General
- Approval of a Loan Management and Recovery Strategy
- SARS reinstating data sharing to strengthen eligibility verification
- CEO appointment process underway
These steps demonstrate that the institution can improve when held accountable.
Joint accountability framework
A joint accountability framework has been established between DHET, NSFAS, and the Auditor-General. The NSFAS Board will submit a comprehensive report by 30 April 2026, detailing:
- Remedial plan for repeat audit findings
- Consequence management plan with named officials
- Resolution plan for data analytics findings
- ICT modernisation roadmap and HEMIS-NSFAS integration timeline
- Student accommodation audit findings
- Position on a sustainable student funding model
Quarterly accountability sessions will begin in July 2026, with updates reported to the Portfolio Committee on Higher Education.
What students need to know
- 7,805 outstanding appeals must be resolved within 70 days
- Students living in unsafe accommodation have rights under signed contracts; providers failing to meet standards will be removed
- Legitimate NSFAS funding will not be disrupted; investigations target only fraud and misrepresentation
The Minister emphasised the urgency of consequence management: “Those found to have acted unlawfully, negligently, or in bad faith must face clear and decisive consequences, including removal from the institution and possible legal action.”
Read also: NSFAS sits on R4.4 billion surplus while struggling students drown in debt
