NSFAS: TIME TO GET SERIOUS ABOUT FUNDING SA STUDENTS’ FUTURES

By Dr Linda Meyer, MD: IIE Rosebank College, Rosebank International University College

The National Student Financial Aid Scheme (NSFAS) is crucial in providing financial assistance to post-school education students from low-income (below R350,000) households in South Africa. However, the current administration and limitations of NSFAS have caused significant distress among students enrolled in public universities and Technical and Vocational Education and Training (TVET) colleges.

The exclusion of students attending private higher education institutions further exacerbates the challenge, limiting access to quality education at a time when the capacity of public institutions is shrinking due to fiscal constraints.

The Declining Availability of Public University Spaces

The number of available spaces for first-time entering (first-year) students in public universities has decreased to just over 202,000, a figure that continues to decline due to budgetary constraints within the Department of Higher Education and Training (DHET). According to DHET, South Africa’s public universities receive approximately 1.2 million applications annually. However, this number includes multiple applications from students applying to universities and various programmes, meaning the number of unique applicants is significantly lower.

This limitation has placed increased pressure on students who rely on NSFAS for funding, as many cannot secure admission into public universities and are left with limited options.

Thousands of high-achieving students who meet the academic requirements for university admission are being denied spaces due to the lack of available placements, forcing them to seek alternatives they often cannot afford without financial assistance.

The fiscal constraints on the DHET have also directly impacted university operating budgets. Due to reduced government subsidies, public universities struggle to maintain infrastructure, academic resources, and student support services. According to Universities South Africa (USAf), government subsidies for universities have declined from 49% of total income in 2000 to 40% in 2022. Institutions are forced to increase tuition fees to remain operational, further marginalising students who cannot afford higher education without financial aid.

Policy Confusion and the Reversal of the 0% Fee Increase Announcement

The challenges in higher education funding were further exacerbated by the recent policy confusion surrounding tuition fees. The newly appointed Minister of Higher Education initially announced a 0% fee increase for public universities, a decision that was later reversed due to fiscal limitations. This reversal left many universities uncertain, as they had already begun budgeting based on the initial announcement. The inconsistency in policy decisions has frustrated students, institutions, and stakeholders who rely on stable and predictable funding structures. The government’s inability to provide clear and feasible solutions highlights the urgent need for policy reforms in higher education financing.

The Exclusion of Private Higher Education Students

NSFAS funding is currently restricted to students studying at public universities and TVET colleges, excluding those enrolled in private higher education institutions. This means that students who do not get a space in a public institution, regardless of their Grade 12 performance, are prejudiced in not being able to access financial government support and are additionally constrained to further their studies in a public institution.

This policy decision is outdated and counterproductive, especially considering that many private institutions offer high-quality education and can accommodate more students who cannot find placement at public universities.

According to the Department of Higher Education, there are over 130 registered private higher education institutions in South Africa, many of which have world-class academic programmes and state-of-the-art facilities that will benefit financially disadvantaged students.

Private higher education institutions play an essential role in South Africa’s education ecosystem, offering accredited programmes that contribute significantly to the skilled workforce. By failing to extend NSFAS funding to private institutions, the government is limiting students’ access to alternative, viable education opportunities. Many students denied access to public universities could thrive in private institutions without financial assistance.

The Psychological and Economic Impact on Students

The distress caused by NSFAS extends beyond financial difficulties. Many students experience extreme anxiety due to the uncertainty surrounding their funding applications, delayed disbursements, and mismanagement of funds. A 2023 study conducted by Higher Health found that 63% of university students who depend on NSFAS funding reported high levels of financial stress, which negatively impacted their academic performance and mental health.

In recent years, reports of students going without accommodation, food, and study materials have surfaced due to inefficiencies in NSFAS administration. Housing providers have reported severe financial strain due to NSFAS failing to pay them on time, resulting in students being evicted from their residences or forced to live in unsafe conditions. According to the South African Student Accommodation Association (SASA), NSFAS arrears to housing providers exceeded R1.4 billion in 2023, affecting thousands of students nationwide. Many students who were initially allocated funding have had their allowances abruptly stopped, leaving them stranded with no financial support. The case has been made ad nauseam that DHET should pay public institutions directly as was successfully done in the past and curb NSFAS as the ineffective middleman at a huge additional cost.

Additionally, students unable to access higher education due to funding restrictions face bleak economic prospects. According to Statistics South Africa, South Africa’s youth unemployment rate currently stands at 59%. The lack of financial support forces many students to drop out or remain unemployed, exacerbating the country’s high youth unemployment rate. Education is a critical driver of economic mobility, and the inaccessibility of funding hinders long-term national economic growth.

The Need for Policy Reform

The South African government must urgently reform NSFAS policies to address these pressing challenges. The first step should be to expand NSFAS funding eligibility to include students attending accredited private higher education institutions. This expansion would relieve the burden on public universities while ensuring that more students receive the financial aid they need to complete their studies.

Additionally, the administration of NSFAS requires a significant overhaul to improve efficiency and transparency. The frequent delays and mismanagement of funds have severely affected students who depend on timely disbursements for their basic needs. Implementing a more accountable and streamlined system would ensure that students receive the financial support they require without unnecessary hardship. Addressing issues such as delayed housing payments, ensuring that high-performing students are prioritised for funding, and creating a contingency plan for students who suddenly lose financial support will help stabilise the higher education sector.



Conclusion

NSFAS is meant to be a lifeline for financially disadvantaged students in South Africa, but its current limitations and administrative inefficiencies have led to widespread distress. The decreasing availability of spaces in public universities further highlights the urgency of extending NSFAS funding to private higher education institutions. By making financing more accessible and improving the efficiency of financial aid distribution, the government can ensure that all eligible students, regardless of where they study, can access quality education and build a better future for themselves and the country.