Key Takeaways
- Over 40,000 students at 76 higher‑education institutions received improper NSFAS funding totalling about R5.1 billion, with recoveries already exceeding R2 billion.
- Systemic deficiencies in NSFAS’s governance, administration, funding coordination, and oversight have caused persistent delays, communication breakdowns, and maladministration.
- The Public Protector’s investigation links these failures to concrete harms for students, including food insecurity, accommodation instability, and the withholding of academic qualifications.
- Remedial actions proposed include clearing appeal backlogs, improving communication and system integration, strengthening fraud controls, holding responsible officials accountable, and adopting international best‑practice models from Australia and New Zealand.
- Stakeholders have 60 days to respond to the Section 7(9) notice; the Minister of Higher Education and Training must submit an integrated remedial plan by 1 November 2026.
Background and Scope of the Investigation
Advocate Kholeka Gcaleka, the Public Protector, issued a Section 7(9) notice outlining findings from an inquiry into the National Students Financial Aid Scheme (NSFAS). The probe examined more than 40,000 students who were improperly funded across 76 higher‑education institutions, amounting to roughly R5.1 billion. The figure originates from a Special Investigating Unit (SIU) investigation conducted under Proclamation R88 of 2022, which was reported to Parliament’s Standing Committee on Public Accounts. Recoveries to date exceed R2 billion, indicating that a substantial portion of the misallocated funds can be reclaimed, but the scale of the problem remains alarming.
Systemic Deficiencies Identified
The Public Protector concluded that the issues are not isolated incidents but reflect recurring patterns of administrative failure throughout the sector. The investigation highlighted systemic shortcomings in NSFAS’s governance, administration, funding coordination, and oversight. These weaknesses impair the entity’s ability to discharge its statutory mandate effectively, efficiently, and in line with the standards expected of a public body entrusted with public funds and vulnerable beneficiaries.
Governance Instability at NSFAS
A central theme of the findings is the persistent governance instability within NSFAS. Over the past eight years, the scheme has undergone three interventions under section 17A of the NSFAS Act—in 2018, 2024, and 2026. Additionally, the former chief executive officer, Andile Nongogo, was suspended and later terminated in 2023, leading to an extended period of acting executives and the eventual dissolution of the NSFAS board in 2024. This continual turnover and lack of stable leadership have contributed to administrative weakness and inadequate systems, further eroding NSFAS’s operational capacity.
Impact on Students: Delays and Prejudice
The investigation documented that students have suffered recurring delays in funding decisions, appeal outcomes, and allowance payments. These delays have produced direct and foreseeable prejudice, manifesting as food insecurity, accommodation instability, and exposure to unsafe living conditions. By hindering timely access to financial support, NSFAS’s shortcomings jeopardize students’ basic wellbeing and their ability to persist in higher education.
Communication Breakdowns
NSFAS’s accessibility and communication with students were found to be seriously deficient. The entity reported that it could not resolve 80 % of queries received through its contact centre because they required escalation to internal units. The centralized Cape Town‑based walk‑in service and ineffective query‑resolution mechanisms at the institutional level undermine the Batho PeLe principle of access. Moreover, the inability to provide responsive administrative mechanisms contravenes the constitutional obligation to progressively make further education accessible to all.
Delayed Implementation of Missing‑Middle Funding
Concerns were raised about the rollout of reforms designed to expand support for the so‑called missing middle. The Department of Higher Education and Training (DHET) reported that NSFAS had been capitalised with R3 billion over a three‑year cycle (2024‑2027) for this purpose. Despite receiving 43,261 eligible applications, NSFAS could not disburse the funds because it needed to procure a new loan system. Furthermore, three years after the 2022 Ministerial Task Team report on student‑funding policy was tabled to Cabinet, progress in converting its recommendations into an operational, coherent reform programme remains limited, allowing previously identified systemic weaknesses to persist.
Withheld Qualifications and the Close‑Out Project
The investigation also examined NSFAS’s Close‑Out Project, initiated in 2021 to reconcile financial data between NSFAS and tertiary institutions. The project remains incomplete, and outstanding reconciliations have contributed to prejudice for students whose qualifications are withheld due to unresolved tuition accounts. Although these students have completed their studies, the withholding of certificates limits their ability to secure employment, pursue further studies, or participate meaningfully in the labour market. The Public Protector reviewed 12 complaints involving students whose institutions were collectively owed R601,000 in tuition fees; following her intervention, the accounts were ultimately settled. She urged the sector to adopt less prejudicial debt‑recovery mechanisms that do not block graduates from accessing the qualifications needed to enter the economy.
Proposed Remedial Actions
To address the systemic weaknesses, the Public Protector has outlined a series of remedial measures. NSFAS must develop plans to clear existing appeal backlogs, improve communication with students, strengthen fraud controls and cybersecurity, integrate its systems with higher‑education institutions, and enhance verification interfaces with key government data sources. Additionally, NSFAS is required to identify officials or former officials responsible for governance breaches, maladministration, and control failures that caused prejudice to students, with possible disciplinary measures, civil recovery, or criminal referrals where warranted.
The Minister of Higher Education and Training is urged to engage with other organs of state regarding the adoption of international best practices in student financial aid. The investigation points to Australia and New Zealand as exemplars, noting their operational efficiency through direct tuition payments to institutions, income‑contingent repayment mechanisms, and the use of tax authorities to collect repayments.
Accountability and Timelines
The proposed remedial action includes specific deadlines for reporting. The Minister of Higher Education and Training must submit an integrated plan on the commencement of remedial action and planning for the 2027 academic year by 1 November 2026. Tertiary institutions are required to audit academic certificates withheld because of student debt and furnish the Public Protector with information on affected students. All implicated parties—NSFAS, DHET, institutions of higher learning, and other relevant stakeholders—have 60 days to respond to the Section 7(9) notice before the Public Protector finalises her findings and remedial recommendations.
Conclusion
The Public Protector’s investigation underscores that the ultimate goal is not merely to catalogue instances of maladministration but to uncover the root causes of recurring failures in student financial aid. By proposing practical, sustainable, and systemic remedial measures, the initiative aims to strengthen governance, improve public administration, and advance the progressive realisation of the constitutional right to further education for all South Africans. The success of these efforts will hinge on timely implementation, accountability of responsible officials, and sustained cooperation among NSFAS, DHET, higher‑education institutions, and other sector role players.