NSFAS scrutiny over 40,000 improperly funded students has intensified after the Public Protector raised serious concerns about the administration of student financial aid in South Africa.

More than 40,000 students across 76 higher education institutions were allegedly improperly funded by the National Student Financial Aid Scheme (NSFAS), with the value of the funding estimated at approximately R5.1 billion.

The findings form part of a broader investigation by Public Protector Advocate Kholeka Gcaleka into alleged systemic weaknesses within NSFAS, the Department of Higher Education and Training (DHET), universities and other stakeholders responsible for student funding.

The investigation comes as thousands of students depend on NSFAS to access tuition, accommodation and other forms of financial support.

NSFAS funding crisis raises concerns

The latest developments have placed the NSFAS funding crisis under renewed scrutiny.

According to the Public Protector, the R5.1 billion figure is linked to findings from a Special Investigating Unit (SIU) investigation conducted under Proclamation R88 of 2022.

The SIU investigation identified more than 40,000 students who were improperly funded across 76 higher education institutions. More than R2 billion had reportedly been recovered.

The Public Protector said the SIU findings, together with complaints received by her office and information gathered through engagements with stakeholders, provided prima facie evidence of probable systemic maladministration.

This prompted the Public Protector to issue a Section 7(9) notice to the affected parties.

The notice gives NSFAS, DHET, institutions of higher learning and other implicated parties an opportunity to respond before the Public Protector finalises her findings and proposed remedial action.

Concerns extend beyond individual students

The Public Protector said the problems identified during the investigation were not isolated incidents involving individual students or institutions.

Instead, the investigation found recurring patterns of administrative weaknesses affecting access to funding.

These included delays in funding decisions, problems with appeals, delays in allowance payments, student accommodation challenges and weaknesses in funding criteria.

The investigation also highlighted concerns about the accessibility of NSFAS services and its ability to communicate effectively with students.

For students who depend on financial aid to remain at university or college, delays can have serious consequences.

Public Protector investigation examines NSFAS governance

The Public Protector investigation also examined the governance structure and administrative stability of NSFAS.

Gcaleka highlighted several interventions involving NSFAS under Section 17A of the NSFAS Act during the past eight years.

These occurred in 2018, 2024 and 2026.

The investigation also considered the suspension and eventual termination of former NSFAS chief executive officer Andile Nongogo in 2023, the prolonged use of acting executives and the dissolution of the NSFAS board in 2024.

According to the Public Protector, these developments contributed to an institution affected by governance instability and inadequate systems.

Such weaknesses can make it difficult for a public entity to process applications, respond to appeals and distribute funding efficiently.

Delays affect students directly

The investigation found that students experienced repeated delays in funding decisions, appeals and allowance payments.

The Public Protector said these delays resulted in direct and foreseeable prejudice.

Among the consequences were food insecurity, accommodation instability and exposure to unsafe living conditions.

For many students, NSFAS funding is essential for remaining enrolled and completing their studies.

A delay in receiving allowances can therefore affect more than a student’s finances. It can also influence whether a student can afford transport, food, accommodation and other basic needs.

80% of NSFAS queries reportedly unresolved

Another major concern identified during the investigation was NSFAS’s ability to respond to student queries.

According to the Public Protector, NSFAS reported that it could not resolve 80% of queries received through its contact centre because many had to be escalated to internal units.

The Public Protector said this raised concerns about accessibility and effective communication.

The centralised nature of NSFAS’s walk-in service in Cape Town was also highlighted as a challenge.

For students studying far from Cape Town, accessing assistance in person can be difficult and expensive.

The Public Protector said ineffective query-resolution arrangements undermined the Batho Pele principle of access and raised concerns about the constitutional obligation to progressively make further education accessible.

Student financial aid reform faces delays

The investigation also examined reforms designed to expand student financial aid, particularly for students commonly described as the “missing middle”.

These are students who may not qualify for traditional NSFAS support but still struggle to afford higher education.

DHET reported that NSFAS had received R3 billion over a three-year period from 2024 to 2027 to support students in this category.

However, the Public Protector said NSFAS received 43,261 applications from students eligible for the funding but could not roll out the programme because it needed to procure a new loan system.

The delay has raised questions about the effectiveness of reforms intended to broaden access to higher education.

Ministerial recommendations remain a concern

The Public Protector also examined progress on recommendations contained in the 2022 Ministerial Task Team report on student funding policy.

Gcaleka said there had been limited progress in converting the recommendations into an operational and coherent funding reform programme.

The concern is that delays in implementing reforms could allow existing weaknesses to continue affecting students.

The Public Protector said the situation required practical and sustainable changes to strengthen the student funding system.

NSFAS maladministration leaves graduates without certificates

Another issue highlighted by the investigation involves students who completed their qualifications but were unable to receive their certificates because of outstanding tuition accounts.

The investigation examined NSFAS’s Close-Out Project, which was launched to reconcile financial information between NSFAS and tertiary institutions.

NSFAS acknowledged that the project began in 2021 but remained incomplete.

The Public Protector found that unresolved reconciliations contributed to situations where students’ qualifications were withheld because institutions believed money remained outstanding.

In one part of the investigation, 12 complaints involved students whose institutions were owed a combined R601,000.

Although the students had completed their studies, they could not access their certificates until the financial issues were resolved.

Following intervention by the Public Protector, the outstanding accounts were eventually settled.

The situation illustrates how NSFAS maladministration or unresolved financial disputes can have long-term consequences for graduates.

Without a certificate, graduates can face difficulties when applying for employment or further studies.

Proposed action to fix the NSFAS system

The Public Protector has proposed several remedial measures to address the weaknesses identified in the investigation.

These include clearing outstanding appeal backlogs, improving communication with students and strengthening fraud controls and cybersecurity.

NSFAS has also been urged to improve integration between its systems and those of higher education institutions.

Better verification interfaces with government databases have also been proposed to improve the accuracy and efficiency of funding decisions.

The Public Protector further wants NSFAS to identify officials or former officials who may have been responsible for governance failures, maladministration or control weaknesses that caused prejudice.

Where appropriate, the proposed action could include disciplinary measures, civil recovery or criminal referrals.

Lessons for South Africa higher education

The findings have broader implications for South Africa higher education.

The Public Protector said the investigation was not simply about identifying individual instances of maladministration.

Instead, the objective is to address the underlying causes of repeated failures in student financial aid.

The office has pointed to international examples, including Australia and New Zealand, where student funding systems use mechanisms such as direct tuition payments, income-contingent repayments and cooperation with tax authorities.

The Public Protector believes lessons from these systems could help South Africa develop a more efficient and sustainable funding model.

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What happens next?

The latest NSFAS scrutiny over 40,000 improperly funded students does not represent the final outcome of the investigation.

Gcaleka stressed that affected and implicated parties still have an opportunity to make representations that could influence the final findings.

NSFAS, DHET, higher education institutions and other affected parties have 60 days to respond to the Section 7(9) notice.

The Minister of Higher Education and Training is expected to submit an integrated plan covering remedial action and preparations for the 2027 academic year by 1 November 2026.

Universities and other tertiary institutions will also be required to audit academic certificates withheld because of student debt and provide information about affected students.

The outcome could have significant consequences for how student financial aid is administered in South Africa.

For students, the key issue is whether the proposed reforms will lead to faster funding decisions, better communication, stronger governance and fewer administrative failures.

As the Public Protector continues the process, the NSFAS funding crisis places renewed attention on the importance of protecting public funds while ensuring that students receive the support they need to complete their education.