NSFAS Student Accommodation Déjà VU

As students and landlords suffer again, OUTA calls on the Minister of Higher Education to intervene urgently to prevent student unrest across SA

Almost exactly a year ago, OUTA called on the National Student Financial Aid Scheme (NSFAS) to allow universities and colleges to manage student accommodation “while NSFAS sorts out its student accommodation programmes”.

“However, despite these warnings, NSFAS’s poor handling of private student accommodation has led to struggling providers, a failed accreditation programme, and – ultimately – student protests,” says Rudie Heyneke, senior project manager at OUTA and lead investigator into NSFAS corruption.

On 20 January 2025, the Private Student Housing Association (PSHA), which provides 80 000 beds nationwide, issued a statement warning that accommodation providers would not reopen for returning students unless NSFAS settles the R44 million owed for last year’s accommodation within 14 days. Thousands of students returning to universities and colleges nationwide will be affected if NSFAS does not adhere to the call for payment.

Heyneke warns that a student accommodation crisis will spark new unrest. “Both students and landlords are victims of NSFAS’s poor financial management. OUTA has been warning since 2023 that NSFAS is sitting on a student accommodation time bomb, and this issue must be urgently addressed.”

Ignoring OUTA’s warnings and landlords’ objections, NSFAS launched its accommodation portal for the 2024 academic year. “Landlords were forced to register on this portal despite it not being fully operational. To make matters worse, the demand for NSFAS-accredited housing far exceeded the supply of approved facilities,” Heyneke explains. He adds that the inexperience and lack of skills among many NSFAS-appointed accreditation agents worsened the problem, leading to student protests at various campuses early last year.

“Despite OUTA’s warnings, a detailed report, and a meeting with Mr Freeman Nomvalo, the NSFAS administrator appointed in April 2024, we seem to be back at square one,” says Heyneke.

OUTA informed Nomvalo that the corruption and irregularities surrounding student accommodation tenders were far more extensive than the issues with student allowances, which led to the dismissal of former CEO, Andile Nongogo. However, Nomvalo seemingly disregarded OUTA’s concerns, and NSFAS proceeded with its platform and accreditation process, seemingly unchecked.

Student accommodation became a significant issue at the start of 2023 when Minister Blade Nzimande announced a reduction in the accommodation contribution from R60 000 to R45 000 per year. As a result, students were forced to sleep in classrooms, libraries, and even on the streets. Heyneke is concerned that the same issues will arise for the 2025 academic year. “The operational issues with the accommodation portal remain unresolved. Accreditation and grading processes are a mess, and NSFAS has failed to pay landlords for accommodation provided in 2024, leaving them in financial distress.”

Heyneke questions why NSFAS has not paid landlords despite reporting a surplus of R22.656 billion in its 2022/23 financial statements. “With the 2023/24 statements yet to be released, it’s unclear whether NSFAS used the surplus. Why were landlords not paid?”

OUTA repeats its call for student accommodation to be managed by universities and TVET colleges. “This system worked well before NSFAS imposed its irrational processes. Landlords are forced to use the NSFAS student accommodation platform to register beds, while NSFSAS-funded students can only secure accommodation from registered landlords via the NSFAS accommodation platform. No rental agreement between accommodation providers and students is possible without using this platform,” Heyneke says.

Heyneke says it’s worrying that NSFAS now controls the whole process. “From the registration of beds, accreditation of properties, advertisement of accommodation, the search engine for students and the provision of a standardised rental agreement, to payment of accommodation. On top of that, NSFAS deducts 5% from landlords’ payments for using a platform they were forced to adopt. This is a monopoly.”

OUTA urges Minister Nobuhle Nkabane to use her executive power to end NSFAS’s irrational accommodation programme. Heyneke stresses that the minister must prevent NSFAS from manipulating the system and putting students and landlords at risk. “From the outset, the student accommodation portal and accreditation process were flawed. OUTA’s investigation highlighted these issues, but the NSFAS board, other stakeholders, and the Administrator chose to ignore the problem, neglecting their duty to the country’s poorest students.”

Heyneke notes that OUTA has already received reports of student unrest in KZN over accommodation. “We urgently call on the Minister to take action before protests lead to injuries, deaths, damage to infrastructure, or disruption of programmes that worked before NSFAS introduced its irrational and damaging policies.”

Given the ongoing administrative and communication issues during the application, registration, and appeal processes, OUTA welcomes the deployment of NSFAS officials and interns at tertiary institutions. “NSFAS’s communication channels have been ineffective for years, and this intervention is long overdue.”