By Hope Ntanzi.
More than 40,000 students at 76 higher education institutions were improperly funded to the value of about R5.1 billion, according to findings cited by the Public Protector in an investigation into the National Students Financial Aid Scheme (NSFAS).
Public Protector Advocate Kholeka Gcaleka released a Section 7(9) notice on Tuesday, setting out findings of systemic deficiencies in the administration, governance, funding, co-ordination and oversight of student financial aid.
The R5,1bn figure comes from an investigation by the Special Investigating Unit (SIU) under Proclamation R88 of 2022, which was reported to Parliament’s Standing Committee on Public Accounts.
According to the Public Protector, the SIU investigation identified more than 40,000 students who had been improperly funded across 76 higher education institutions, with recoveries exceeding R2bn.
Gcaleka said the findings, together with complaints received by her office, stakeholder engagements and other oversight findings, strengthened the view that there was “prima facie evidence of probable systemic maladministration” warranting an investigation.
The investigation examined NSFAS, the Department of Higher Education and Training (DHET), institutions of higher learning and other relevant sector role players.
Gcaleka said the investigation began after complaints were raised against NSFAS over administrative deficiencies affecting students’ access to financial aid and, consequently, higher education.
In considering those complaints, her office identified broader challenges across the higher education sector.
“These included, amongst others, inadequate access to funding for tuition by students requiring assistance, inefficiencies and maladministration within existing funding mechanisms, student accommodation challenges, funding criteria and delays in the disbursement of funding allowances,” Gcaleka said.
The Public Protector said the issues were not isolated incidents affecting individual students or institutions, but reflected recurring patterns of administrative failure across the sector.
NSFAS governance instability
The investigation found that NSFAS had been affected by persistent governance instability, administrative weaknesses and inadequate systems, which impaired its ability to fulfil its statutory mandate effectively.
The Public Protector highlighted three interventions under section 17A of the NSFAS Act in the past eight years, in 2018, 2024 and 2026.
The investigation also considered the suspension and subsequent termination of former NSFAS chief executive officer Andile Nongogo in 2023, the extended use of acting executives and the dissolution of the NSFAS board in 2024.
“The evidence gathered depicts NSFAS as an institution affected by persistent governance instability, administrative weakness and inadequate systems,” Gcaleka said.
“These deficiencies have impaired its ability to discharge its statutory mandate effectively, efficiently and in a manner consistent with the standards expected of a public entity entrusted with public funds and vulnerable beneficiaries.”
The Public Protector found that students had experienced recurring delays in funding decisions, appeal outcomes and allowance payments.
These delays had caused what the investigation described as direct and foreseeable prejudice, including food insecurity, accommodation instability and exposure to unsafe living conditions.
80% of NSFAS queries unresolved
The investigation also found serious problems with NSFAS’s accessibility and communication with students.
According to the Public Protector, NSFAS reported that it was unable to resolve 80% of queries received through its contact centre, because they had to be escalated to internal units.
Gcaleka said NSFAS’s limited accessibility, including its centralised Cape Town-based walk-in service and ineffective query-resolution arrangements at institutional level, undermined the Batho Pele principle of access.
She said the inability to provide accessible and responsive administrative mechanisms also undermined the constitutional obligation to progressively make further education accessible.
Missing-middle funding delayed
The Public Protector also raised concerns about the implementation of reforms aimed at expanding student funding, including support for the so-called missing middle.
DHET reported that NSFAS had been capitalised with R3 billion over a three-year cycle from 2024 to 2027 to support students in this category.
However, despite receiving 43,261 applications from students eligible for the funding, NSFAS could not roll it out because it needed to procure a new loan system.
The Public Protector also found that progress in implementing recommendations contained in the 2022 Ministerial Task Team report on student funding policy had been inadequate.
“Three years after the report was tabled to Cabinet, the evidence indicates limited progress in converting the recommendations into an operational and coherent funding reform programme,” Gcaleka said.
The delay had allowed the systemic weaknesses identified by the task team to persist, to the continued prejudice of students.
Students left without qualifications
The investigation also examined NSFAS’s Close-Out Project, which was intended to reconcile financial data between NSFAS and tertiary institutions.
NSFAS acknowledged that the project began in 2021 and remained incomplete.
The Public Protector found that the outstanding reconciliations had contributed to prejudice for students whose qualifications remained withheld because of unresolved tuition accounts.
“Although these students have completed their studies, the withholding of certificates limits their ability to access employment, pursue further studies and participate meaningfully in the labour market,” Gcaleka said.
The investigation considered 12 complaints involving students whose institutions were owed a combined R601,000 in tuition fees.
The students had completed their studies but were unable to obtain their certificates because of the outstanding amounts.
Following intervention by the Public Protector, the accounts were ultimately settled.
Gcaleka said the higher education sector should adopt less prejudicial debt-recovery mechanisms that do not prevent graduates from accessing qualifications needed to enter the economy.
Proposed remedial action
The Public Protector has proposed a series of remedial measures aimed at addressing the systemic weaknesses identified in the investigation.
Among them, NSFAS would be required to develop plans to clear existing appeal backlogs, improve communication with students, strengthen fraud controls and cybersecurity, integrate its systems with higher education institutions and improve verification interfaces with key government data sources.
NSFAS would also be required to identify officials or former officials responsible for governance breaches, maladministration and control failures that caused prejudice to students.
The proposed remedial action includes “disciplinary measures, civil recovery, or criminal referral processes” where warranted.
The Public Protector has also proposed that the Minister of Higher Education and Training engage with other organs of state on the possible adoption of international best practices in student financial aid.
The investigation found that Australia and New Zealand appeared strongest in operational efficiency, with tuition paid directly to institutions, income-contingent repayment mechanisms and the use of tax authorities to collect repayments.
“The ultimate purpose of this investigation is not merely to identify instances of maladministration, but to determine the root causes of the recurring failures affecting student financial aid and to propose practical, sustainable and systemic remedial measures that will strengthen governance, improve public administration and enhance the progressive realisation of the constitutional right to further education.”
The proposed remedial action includes deadlines for the Minister of Higher Education and Training NSFAS, universities and other institutions to report on implementation.
The Minister is expected to submit an integrated plan on the commencement of remedial action and planning for the 2027 academic year by November 1, 2026.
Tertiary institutions would also be required to audit academic certificates withheld because of student debt and provide the Public Protector with information on affected students.
Gcaleka stressed that affected and implicated parties could still make representations that could change the intended findings.
NSFAS, DHET, institutions of higher learning and other affected parties have 60 days to respond to the Section 7(9) notice before the Public Protector finalises her findings and proposed remedial action.