The National Student Financial Aid Scheme (NSFAS) recently introduced the R45 000 cap for student accommodation allowance. This was implemented to manage the unregulated increasing costs of student accommodation.
Introducing the cap for student accommodation meant ensuring that students, parents and NSFAS were not taken advantage of. At the moment, both private and institutional accommodations at certain universities are above the cap of R45 000, which means many students are not able to afford to live near campus.
NSFAS relied on the study done by the International Finance Corporation, a division of the World Bank, which showed what the accommodation costs should be for NSFAS beneficiaries. The accommodation cost also took into account the type of accommodation.
The average cost of accommodation at the University of Limpopo is around R16 000 per year, whereas at the University of Cape Town (UCT) the average cost of accommodation is R78 000. The medium calculation, therefore, is R38 000 per year.
Based on the medium calculation figure, NSFAS decided to set the cap for student accommodation allowance at R45 000. NSFAS shared this data with stakeholders and it was agreed that the cap would accommodate the majority of universities.
However, some institutions were above the cap. These include:
- UCT
- Sol Plaatjie University
- Rhodes University
- University of the Witwatersrand (Wits)
- Stellenbosch University
- University of Pretoria
Some accommodation providers charged up to R90 000 per year which NSFAS believes is their way of exploiting the system. When approached about possibly reducing their accommodation costs, some were unwilling.
Therefore, NSFAS decided to approach the Competition Commission to investigate possible collusions on student accommodation. NSFAS has also fast-tracked the accreditation of providers in these affected areas to ensure that students have access to accommodation within their price range.
