NSFAS Faces R10.6-Billion Oversubscription, Leaving Thousands of Students Stranded

NSFAS Faces R10.6-Billion Shortfall | Thousands of Students Struggle to Register

The National Student Financial Aid Scheme (NSFAS) is once again under fire as widespread student registration delays and funding gaps grip the 2025 academic year.

NSFAS Board Chairperson Karen Stander revealed that the scheme is grappling with a R10.6-billion oversubscription in university funding, a shortfall she attributed to several converging pressures: a surge in the number of qualifying students, South Africa’s worsening cost-of-living crisis, broader household eligibility, and state resources that have declined in real terms.

The oversubscription has translated into thousands of students at universities and TVET colleges struggling to register, secure accommodation, or receive allowances.

CEO Acknowledges Deep Failures

NSFAS CEO Waseem Carrim admitted in an interview that despite its historical success in funding more than 5.5 million graduates, the organisation remains plagued by inefficiencies and instability.

“It’s an organisation in ICU. You need to stabilise it and then reform it so that it becomes responsive to the needs of young people,” Carrim said, noting that NSFAS has had nine CEOs in nine years, alongside multiple dissolved boards and administrators.

Carrim warned that the funding model itself is unsustainable:

• 2023 deficit: R2.5 billion
• 2024 deficit: R5 billion
• 2025 deficit: R10.6 billion
• Projected 2026 deficit: R20 billion

“You cannot run a fund like that,” he cautioned, calling for a sustainable funding framework for higher education.

Human Cost of Failures

Operational breakdowns have led to reports of students going hungry, facing evictions, or dropping out due to delayed allowances and accommodation disputes.

Carrim acknowledged the crisis but said NSFAS has recently stabilised allowance payments, processing about 800,000 monthly disbursements. He added that NSFAS teams are engaging directly with accommodation providers to prevent further student evictions.

Still, about 34,000 students remain excluded due to the current budget deficit, with large numbers at UNISA unable to register for their second-semester modules.

Technology & Systemic Challenges

The CEO admitted that NSFAS’s ICT systems are “not fit for purpose”, particularly for TVET colleges, where manual processing still dominates.

To fix this, Carrim said NSFAS is seeking partnerships with the private sector to modernise systems. Universities will also resume direct responsibility for disbursing student allowances after criticism of NSFAS’s centralised payment system.

Rethinking the Funding Model

Carrim argued that South Africa must move beyond an “all roads lead to university” mindset, instead expanding vocational, technical, and community college pathways.

“The outcome of our education policy has to be employment and productivity. Otherwise, all of the funds we are investing—one of the largest bursary schemes in the world—will not generate the return South Africa needs,” he said.

Missing Middle Still in Limbo

On the “missing middle” — students who do not qualify for NSFAS but cannot afford higher education — Carrim admitted that the new state-backed loan fund has seen poor uptake. He stressed that a sustainable funding model must include solutions for this group.

The Road Ahead

Despite mounting pressure, Carrim reassured students that NSFAS will continue to pay allowances, tuition, and accommodation providers in 2025, while beginning reforms to avoid collapse.

“This is about more than just access. We have to focus on graduation and employment outcomes. Reform is not optional — it’s urgent,” he concluded.