Universities across South Africa are grappling with a growing student debt crisis, with a staggering R700 million debt accumulation reported in 2023 alone. National student debt is hovering around R17 billion and continues to rise, highlighting significant challenges to the financial sustainability of higher education institutions.
The National Student Financial Aid Scheme (NSFAS) accommodation allowance cap has raised concerns among stakeholders who believe it could negatively impact the academic performance of students.
NSFAS provides comprehensive bursaries and student loans to deserving learners enrolled in approved courses at universities and TVET colleges. This includes money for tuition and registration fees as well as several allowances for food, accommodation and learning materials.
At Rhodes University, Vice-Chancellor Professor Sizwe Mabizela raised concerns about the capped accommodation allowance, which he says has exacerbated student debt over the past two years.
Mabizela says many students have been forced to leave accredited residences in search of cheaper, but often unsuitable, accommodation far from campus.
They believe this could hinder students' access to essential resources like the Internet and libraries, crucial for their academic success.
Because of the capping, they want to mitigate the debt they owe to the university, so they rent out back rooms which are not suitable and these are students, more than most, need to be accommodated on campus, have access to internet, library and other facilities that could enhance their success
In 2024, NSFAS capped accommodation costs at R50,000 in metro areas and R41,000 in non-metro areas per year for all institution-owned, leased, and private accommodation.
Students in institution-catered accommodation can receive a maximum allowance of R66,500 in metros and R57,500 elsewhere. Non-metro institutions can request a review of their accommodation cap in exceptional cases with detailed justification
However, the cap on accommodation allowances has sparked frustration across the sector.
During an engagement with Universities South Africa (USAf), NSFAS administrator Freeman Nomvalo acknowledged the issue and announced the formation of a task team, in collaboration with the International Finance Corporation (IFC), to review and potentially overhaul the cap.
We are collaborating with the International Finance Corporation (IFC) to determine more balanced, fairer accommodation costs. We will, in October, advise the sector on whether we’re retaining the cap or overhauling it. To that end, we will move our conference planned for September to October – to align it with the completion of this investigation.
Professor Mabizela expressed deep concern that if these challenges persist, students will face prolonged study periods and increased difficulty completing their qualifications.
Students who need much support, who will be short-changed, who will not be able to succeed and complete their studies and go back to contribute to the betterment of their communities, our society and the world.
Additionally, he pointed out the broader socio-economic impact, where students, driven by poverty, choose the cheapest accommodation to send money home, further compromising their chances of academic success.
"In the process, they are making it difficult for themselves to live sustainably and be able to provide for themselves to succeed at university."
