By Lehlohonolo Lehana.
The National Student Financial Aid Scheme (NSFAS) says they have a R39bn allocation for the university sector and have dispersed about 73% thus far, amounting to R29bn.
NSFAS board held an inaugural briefing to provide insights into governance and administrative developments at NSFAS.
NSFAS was established in 1996 to provide financial assistance to students. Initially, it was run by TEFSA, a non-profit organisation set up in 1991.
TEFSA administered the fund until 2000 and was officially converted into a statutory body in 1999, becoming NSFAS.
NSFAS chairperson Dr Karen Stander said, “they face a budget shortfall of about R10.6bn. We are working with the department of higher education and training and the National Treasury to obtain the requisite concurrence and approval to plug the shortfall and enable students who are facing blocked registrations to be able to register for the 2025 academic year.”
She said payments to universities were processed promptly, ensuring the timely disbursement of allowances and supporting academic continuity.
Stander attributed the shortfall to several key factors, including a growing number of qualifying students, the ongoing cost-of-living crisis, expanding household eligibility, and a decline in state resources in real terms.
“Section 14(3) of the NSFAS Act explicitly prohibits overspending beyond the allocated budget,” Stander noted.
Stander said they would revise the eligibility criteria and conditions for financial aid soon to ensure that, from the next academic year, NSFAS remains within budget while still serving those most in need.
“Our board has approved the development of institutional policies and strategies governing the eligibility criteria and conditions for financial aid. This initiative is not for the distant future but will take effect from the next academic year, as directed by DHET. We must ensure that NSFAS remains within budget, as per the NSFAS Act and the PFMA, while fulfilling our duty to widen access to higher education.
NSFAS CEO Waseem Carrim has revealed that the scheme is owed R45 billion in outstanding student loans and has called on former beneficiaries to begin repayments.
Carrim admitted that NSFAS has struggled with recovering debts over the years.
“It has not had the best debt management strategy. But we cannot, as a board and management, continue to sit on that substantial amount of debt and not collect it,” he said.
He added that many of the students who benefited from NSFAS loans are now employed.
“We know that the majority of graduates in South Africa are employed. Therefore, our view is that students who took up loans, graduated as a result of the fund, and are now employed must repay their debt – not only to NSFAS but to society as well.”
Carrim stressed that repaid funds would be used to support new students in need of financial aid.
This comes as many students across public institutions continue to face hardship, including delays in allowance payments, unresolved applications, and poor communication, which have left some struggling to meet basic needs like food and housing.
Stander confirmed that the fund is reaching out to former loan recipients who received financial aid before 2018.
She said they are reminding them of their contractual obligation to repay once they earn more than R30,000 per year.
“The minimum monthly repayment amount is determined by income level,” she said.
“Debtors earning above R30,000 per year who are not currently making the minimum repayments may have their accounts handed over to an External Debt Collector (EDC).”