EDITORIAL
WHO PAYS FOR NSFAS?
Every year, billions of rands flow into the National Student Financial Aid Scheme (NSFAS), enabling millions of South African students to access higher education. But where does this money come from, and who is responsible for ensuring it is used properly?
At its core, NSFAS is funded by public money, drawn directly from the national budget and ultimately paid for by South African taxpayers. Taxpayers are, in effect, the largest contributors and the true shareholders of the scheme.
Administered under the Department of Higher Education and Training (DHET), NSFAS is the instrument through which the government fulfils its constitutional and policy commitment to expanding access to tertiary education for students from poor and working-class families.
In recent years, allocations have exceeded R40 billion annually, placing NSFAS among the largest education funding programmes in the country.
Additional funding streams include:
- The National Skills Fund (NSF), which supports vocational and skills-based training
- Sector Education and Training Authorities (SETAs), which contribute particularly to TVET college funding
- Recovered student loan repayments from pre-2018 beneficiaries, which are reinvested into the scheme
“NSFAS is not ‘free money’ — it is public money, funded by taxpayers and entrusted to students.”
Since its establishment in 1995, NSFAS funding has grown dramatically, from approximately R40 million in its early years to more than R43 billion in the 2021/22 financial year. This exponential increase reflects both the rising demand for higher education and the government’s commitment to widening access for disadvantaged students.
In recent years, the state has also moved to address the long-standing challenge of “missing middle” students whose household incomes are too high to qualify for NSFAS but too low to afford university fees. In 2024, the government allocated R3.8 billion over the 2024–2025 period to introduce mechanisms to support this group, further expanding the financial footprint of public higher education funding.
Because NSFAS is funded by taxpayers, it remains under intense public scrutiny. The Special Investigating Unit (SIU) has been tasked with probing allegations of corruption and maladministration within the scheme, a reminder that public money demands public accountability.
NSFAS also works with the South African Revenue Service (SARS) to track loan repayments. By linking to tax data, the system can identify when former students are employed and able to repay loans, ensuring that funds revolve back into the system to support future beneficiaries.
Despite its scale and impact, NSFAS faces persistent challenges:
- Sustainability: Demand for funding continues to outpace available government resources
- Administration: Delays in payments and system inefficiencies directly affect students
- Loan Recovery: Ensuring repayment from past beneficiaries remains complex
“The future of NSFAS depends on balancing access, efficiency, and accountability.”
It is within this context that questions of governance inevitably arise. When over R40 billion in public funds is allocated annually to a single entity, oversight is not optional; it is a statutory obligation. The Minister of Higher Education, as the executive authority responsible for the Department and its entities, carries both the political and legal responsibility to ensure that NSFAS is managed by individuals who are fit for purpose and capable of safeguarding public funds.
Recent criticism of the Minister for placing NSFAS under administration has centred on claims of insufficient consultation. However, the power to intervene in a public entity falls within the executive authority vested in the Minister by law. Where governance failures, financial mismanagement, or systemic instability threaten the integrity of a publicly funded institution, decisive intervention is not only permissible, it may be required.
Administration is not an act of punishment; it is a corrective mechanism. It is invoked to stabilise institutions, restore proper governance, and protect public resources. The responsibility to act ultimately rests with the executive authority charged with oversight. Consultation may be desirable in many policy processes, but where urgent intervention is deemed necessary to safeguard public funds, the prerogative to act resides with the Minister.
For millions of South African students, NSFAS is more than a funding scheme; it is a gateway to opportunity. But that opportunity is underwritten by taxpayers. With tens of billions of rand at stake each year, the conversation cannot end at access alone. It must also include stewardship.
Public trust in NSFAS depends not only on how many students are funded, but on how responsibly and transparently those funds are managed. Accountability is not an abstract principle; it is the foundation upon which sustainable access to higher education rests.
Understanding how NSFAS is funded and who is responsible for its oversight is necessary for students, policymakers, and the public. As debates over higher education funding continue, transparency, lawful governance, and executive accountability will remain central to the system’s sustainability.
