Allegations of collusion at private student accommodation has caught the attention of the Department of Higher Education and Training (DHET) and the Minister of Higher Education, Blade Nzimande.
Several students from institutions such as the University of Johannesburg (UJ), the University of KwaZulu-Natal (UKZN) and Tshwane University of Technology (TUT) have made claims that private student accommodation providers have increased rent prices for their own personal gain, which is now costing over R4000 per month.
Student accommodation prices are said to be raised to “astronomical levels”, surpassing the R4,500 per month threshold stipulated by NSFAS, allegedly having the worst effect on students at the University of Pretoria (UP), Wits University, Stellenbosch University, and the University of Cape Town (UCT).
Beneficiaries of the National Student Financial Aid Scheme (NSFAS) have their accommodation fees (amongst other costs) covered by the bursary scheme, which is typically enough to sustain a student and cover their relevant expenses.
However, as of late, students residing at private accommodation facilities have been finding it particularly challenging to afford rent, due to alleged unauthorised price hikes by private accommodation providers.
As a result, many students have been “left without accommodation...because they could not afford the new rent amounts”.
"It is quite disturbing that you'll find a situation where landlords, owners of [accommodation] buildings, are increasing prices for our students; they are taking advantage in terms of the money they [students] receive from government in the form of NSFAS," says President of the South African Students Congress (SASCO), Vezinhlanhla Simelane.
"As an organization, we are very concerned and we believe there must be a thorough investigation in terms of [finding out] why, what is the reason [accommodation providers] are doing this," continued Simelane.
NSFAS previously noted that during 2022, the yearly price at certain student accommodations had reached up to R90,000, which is a matter of concern that they are committed to combating.
In a recent statement released by the financial aid provider, NSFAS was "mulling over reporting student accommodation providers to the Competition Commission for possible collusion and price gouging."
According to Simelane, the alleged perpetrators have been taken to the Competition Commission, a government agency created to "investigate, control and evaluate restrictive business practices, abuse of dominant positions and mergers in order to achieve equity and efficiency in the South African economy", so that a standard price can be set for private accommodation.
In an attempt to regulate the prices for NSFAS accredited accommodation sites, NSFAS has introduced a cost cap of R45 000 per annum, challenging those providers who have forced prices above and beyond this amount.
As it currently stands, NSFAS has launched a process to “unpack the cost structure of various student accommodation segments to understand what the accommodation rental includes”.
According to SASCO, one solution to combat this current issue of collusion regarding private student accommodation rent, would be for universities to own the accommodations themselves, instead of renting from third-parties.
"At some point themselves, universities must be able to have their own accommodations so that we are able to deal with this thing of pricing... but at the same time you'll find a situation where there are some universities that have their own accommodation, but in terms of standards, they are not right, so we don't want to encourage universities to own buildings that are not proper for students to be accommodated [in]. We want universities to have their own accommodation that is proper, that is student-friendly, so that students can excel in their academics," says Simelane.
Student accommodation has been a long-standing issue, particularly this year even though institutions of higher education just re-opened two weeks ago for the new academic year, but some students have been left stranded and sleeping on the streets.