Department Investigates R45 000 NSFAS Cap As Students Struggle

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At the start of the year, NSFAS introduced a student accommodation price cap. While classes and studies are well underway at our tertiary institutions, students are still struggling to find suitable accommodation near their campuses. 

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At the beginning of the academic year, the National Student Financial Aid Scheme (NSFAS) introduced a R45,000 student accommodation cap. This had a snowball effect and thousands of funded students were left without a place to stay, resulting in criticism from students and institutions alike. 

This accommodation cap left students at some of South Africa's public universities stranded, some even having to sleep on campus floors as the bursary scheme left them homeless. This sparked protests at institutions nationwide and NSFAS and the Department of Higher Education and Training (DHET) had to scramble to find acceptable housing for these students.

Finding safe, affordable and suitable student housing in close proximity to campus was a challenge students receiving financial aid from NSFAS then had to deal with. This blanket cap applied to students in university housing as well as students in private accommodation, even though these prices differ greatly.

This price cap has also negatively impacted universities, resulting in many institutions appealing the decision. However, the Minister of Higher Education, Science and Innovation, Blade Nzimande, has defended his decision to let the price cap stand.

According to the Department, this allowance cap was based on the following evidence:

  • The World Bank’s International Finance Corporation report
  • Existing data from NSFAS claiming accommodation historically from all institutions (both universities and TVET colleges)
  • Recommendations from the MTT report
  • Available data that examined the generic student housing market

The Minister also claims that he was unaware of the NSFAS cap leaving students struggling to find accommodation.

When my department presented on readiness for the academic year, we reported that universities made provision for emergency accommodation for students where possible. 

At the end of March, Universities South Africa (USAf) also confirmed that emergency accommodation had been offered to students. 

Earlier that month, on 3 March 2023, a meeting took place between USAf, the DHET and various vice-chancellors and stakeholders, where concerns were raised regarding the R45 000 cap. In response, the Minister established a Task Team consisting of Department officials, affected institutions and NSFAS.

Relevant data is being gathered from all 26 of the public universities in the country to determine how many students are affected and which accommodation categories they fall into. Once all the data has been collected and analysed, a workshop will be held with the relevant stakeholders. 

In the meantime, an internal analysis has been conducted by the Department to determine which universities will not be able to financially cope with this accommodation cap, as well as what adjustments can be made to ensure that they receive the necessary support. All recommendations will be submitted to the Department.

The Minister also states that he has been informed by NSFAS that the scheme plans to redirect funded students to more affordable accredited accommodation as identified by its team of accreditors. 

Suggested Article:

NSFAS officials meeting with Higher Education regarding student accommodation

Recent changes to NSFAS, include the announcement of a price cap for student accommodation providers. This change, has however been heavily criticised for a number of reasons. 



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