Universities Are Concerned About NSFAS Allowance Cap Increasing Student Debt

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Bursaries from the National Student Financial Aid Scheme (NSFAS) seeks to ensure students can obtain a tertiary education qualification without worrying about associated costs. This includes providing them with allowances for meals, learning materials and accommodation costs. 

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The National Student Financial Aid Scheme (NSFAS) briefed the media on Monday afternoon to update the public on the current state of affairs at the financial aid scheme. Officials touched on challenges around the new payment system, defunding of students and streamlining student accommodation. 

NSFAS CEO, Ernest Khosa says they visited campuses around the country to evaluate accommodation challenges being faced by students. They identified several challenges including inappropriate housing and living conditions that are not conducive to learning. 

NSFAS is piloting a new accommodation system which allows accommodation providers to list their properties by providing their property names, location and images. NSFAS will then contact them and send a panel of experts to accredit and grade the properties to ensure that they are suitable for student living.

The pilot programme will allow NSFAS evaluate the system and resolve challenges it encounters, the system will be opened fully for both providers and students.

It is hoped that this will ensure students live in appropriate accommodation that is conducive to their studies. 

NSFAS Accommodation Cap 

NSFAS also introduced an accommodation cap of R45 000 to prevent profiteering by accommodation providers. However, the introduction of the cap has meant that students can no longer afford to pay the price charged by accommodation providers in urban areas. 

Khosa called on institutions who have been negatively impacted by the R45 000 per annum cap to make their submissions and negotiate with private accommodation providers to adjust their rent. 

They added that NSFAS has embarked on a new study that seeks to review the approach for the 2024 NSFAS accommodation cap. The findings of this study will be incorporating the funding policy. 

Khosa believes that the accommodation cap speaks directly to the land question in South Africa and questioned why the children of teachers and nurses are being charged rent of R9 000 while they study. 

NSFAS Slammed For Policies 

The Universities of South Africa (USAf) Board has raised concerns with the Minister of Higher Education, Science and Innovation regarding the NSFAS policy of capping student accommodation expenses. 

USAf explains that the introduction of the accommodation cap created a mismatch between the costs of multi-year contracts with landlords for outsourced/accredited accommodation and what universities are charging, compared to what NSFAS is willing to cover. 

They say this has led to a significant accumulation of student debt, amounting to over R700 million, due to the difference between university charges and NSFAS payments for 2023 alone. 

The Vice-Chancellors communicated their concerns about the accommodation cap to the Minister during a meeting on March 3, 2023, and followed up with a written request to withdraw the policy. This was because universities had already budgeted for 2023 and had assigned students to accommodations that sometimes exceeded the NSFAS cap. 

USAf says as the issue remains unresolved, students are being charged full accommodation fees, driving them into debt that could prevent them from registering in 2024, posing a substantial risk to the education sector.

Khosa says it is unfortunate that stakeholders have to communicate with each other through press statements. They added that NSFAS is committed to open communication with USAf and university Vice-chancellors. 

Suggested Article:

nsfas briefing

More than one million students are currently receiving comprehensive bursaries from the National Student Financial Aid Scheme. However, several challenges are preventing students from accessing their bursaries. 


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