Higher Education and Training Minister Buti Manamela has instructed the National Student Financial Aid Scheme (NSFAS) to urgently cooperate with forensic investigations into fraud, misrepresentation, and system failures affecting student funding.
The directive requires the NSFAS Board to immediately activate its forensic unit and work closely with the Special Investigating Unit (SIU) on ongoing cases, while referring confirmed instances of wrongdoing to the relevant authorities.
This intervention follows a high-level meeting between the Minister, Deputy Ministers Mimmy Gondwe and Nomusa Dube-Ncube, the NSFAS Board, its Acting CEO, and the Auditor-General of South Africa.
NSFAS Audit Outcome Raises Serious Concerns
The meeting focused on NSFAS’ 2024/25 audit results, which revealed major governance and financial control failures. The scheme received a disclaimer of opinion — the worst possible audit outcome — highlighting a breakdown in accountability systems.
The Auditor-General identified nine material irregularities, including four new cases, signalling deep-rooted challenges within the financial aid body.
Despite this, the current administration has committed to resolving longstanding institutional weaknesses.
Thousands Of Ineligible Beneficiaries Flagged
Data analysis uncovered alarming discrepancies in NSFAS funding allocations. The audit found that:
- 822 beneficiaries listed as deceased continued receiving funding
- More than 14 000 students exceeded the income threshold but still received funding
- 321 students were receiving both NSFAS bursaries and Social Relief of Distress (SRD) grants
In addition, thousands of students who either already held qualifications or did not meet academic progression requirements continued to benefit from funding.
Manamela said these findings suggest a significant diversion of funds meant for financially disadvantaged students.
“We are not in a position yet to determine the exact proportion attributable to each cause. What we can do is investigate, recover and prevent recurrence,” Manamela said.
Forensic Investigations And Legal Action
To address these issues, NSFAS has been instructed to work with the SIU to investigate all flagged cases. Any confirmed fraud or misrepresentation will be referred for legal action.
Officials have reassured students that legitimate beneficiaries will not be affected, as the investigations are targeting individuals who misrepresented their circumstances, as well as system failures.
Student Accommodation Crisis Under Scrutiny
The Auditor-General’s report also exposed serious concerns around student accommodation funded by NSFAS.
Students were found to be living in unsafe and undignified conditions, including accommodation near taverns, lack of reliable transport, and harassment from landlords due to delayed payments. In some cases, students had their belongings confiscated.
“These are not audit findings. These are violations of the basic dignity of young people who came to study, not to survive a housing crisis created by the State’s own dysfunction,” Manamela said.
The Minister has ordered an urgent audit of all NSFAS-accredited accommodation providers, with non-compliant providers facing suspension.
A revised student accommodation policy is also being finalised to improve standards, enforcement, and student protection, with completion expected before the end of April 2026.
Steps Taken To Improve NSFAS Operations
Despite the negative audit outcome, some improvements have been noted. NSFAS has cleared its backlog of financial submissions and is on track for the 2025/26 reporting cycle.
Four existing material irregularities are reportedly being addressed to the satisfaction of the Auditor-General.
A Loan Management and Recovery Strategy has been approved, while the South African Revenue Service will resume data-sharing with NSFAS to strengthen eligibility checks.
The process to appoint a permanent CEO is also underway, alongside a legal review of Board appointments.
Stronger Oversight And Accountability Measures
A joint accountability framework has been established between the Department of Higher Education and Training, NSFAS, and the Auditor-General.
The NSFAS Board must submit a detailed remedial plan by 30 April 2026, outlining corrective actions, system improvements, and consequence management measures.
Quarterly oversight meetings will be held, with progress reported to Parliament’s Portfolio Committee on Higher Education.
Focus On Improving Student Experience
The Minister has also prioritised student concerns, particularly delays in processing appeals.
Of the 7 805 outstanding appeals, 98.8% are linked to system failures. NSFAS has been given three weeks to implement a resolution plan and ensure appeals are finalised within 70 days.
Students living in unsafe accommodation have been assured that action will be taken against non-compliant providers.
“NSFAS is being directed to audit and enforce those contracts. Any provider who cannot meet the required standards will be removed from the accreditation list,” the Minister said.
NSFAS “Not Beyond Repair”
Addressing nearly 800 000 students who depend on NSFAS funding, Manamela emphasised that legitimate funding will continue despite the investigations.
“NSFAS is not beyond repair. It is an institution that carries a mandate of enormous national importance to ensure that poverty is not a barrier to education, and that South Africa can build the skilled, capable, and educated society that its people deserve. That mandate is worth fighting for.
“We are committed to NSFAS. We are committed to the students, and we are committed to building an institution that can be trusted,” Manamela said.
