Higher education Minister Buti Manamela says NSFAS has introduced reforms including a direct payment system from 2026 as government responds to accommodation payment failures that left providers and students under financial pressure.
Image: Facebook
Minister of Higher Education and Training Buti Manamela says 111 NSFAS officials have faced disciplinary action in the past 24 months amid governance failures, payment delays, and system breakdowns affecting accredited student accommodation providers.
This comes after uMkhonto weSizwe Party (MK Party) Member of Parliament Nkosinathi Nxumalo raised concerns, citing evidence presented before the Portfolio Committee on Higher Education, including a KwaZulu-Natal private accommodation provider who reportedly lost about 80 student beds due to prolonged NSFAS non-payment.
Nxumalo also referred to repeated findings by the Auditor-General of South Africa, which flagged weaknesses in financial controls, governance failures, and payment system irregularities within NSFAS.
In response, Manamela said NSFAS had initiated both a legal review and a forensic review of the student accommodation project, which found that the entity lacked sufficient internal capacity to manage the system.
“The legal review found that NSFAS had not built the requisite internal capacity to manage the accommodation project. This is an institutional failure, not only a conduct failure,'' he said.
Manamela said the Special Investigating Unit (SIU), under Proclamation R.88 of 2022, is investigating the accommodation project and would make consequence management recommendations upon completion, which NSFAS and the department would act on “without exception”.
He provided a breakdown of disciplinary action over the past 24 months, which included no written warnings, three final written warnings, one dismissal, six precautionary suspensions and no financial recoveries against officials.
Manamela said, “The R2 billion recovered by the SIU is a recovery from service providers and implicated external parties not from individual NSFAS officials.”
Manamela said there was no single audited figure available for financial losses suffered by accommodation providers, but NSFAS had quantified mop-up payments made for delayed claims in 2024 and 2025.
“These mop-up payments represent payments that were delayed rather than permanently lost.”
The payments included R19,577,543 for universities and R17,897,294 for TVET colleges in 2024, and R89,378,826 for universities and R8,585,079 for TVET colleges in 2025.
Manamela said the department acknowledged a “gap in accountability” as the broader financial impact on landlords, including financing costs and operational losses, had not been separately quantified.
He added that NSFAS had engaged accommodation providers in 2025 to resolve outstanding claims, which resulted in improved payment stability.
Manamela said NSFAS would implement a direct payment system to accommodation providers from 2026, removing intermediaries previously linked to payment delays.
“The structural protection for small landlords going forward is the direct payment model introduced from 2026.”
Manamela said the department acknowledged that NSFAS payment failures had contributed to eviction and homelessness risks among students, which raised serious concerns under section 29(1)(b) of the Constitution.
He said government interventions, including direct payments, mop-up settlements, registration protections and SIU-led consequence management, were aimed at correcting systemic failures and improving service delivery.
''The Department’s position is that the measures described above the direct payment model, the mop-up payments, the registration protection directive, and the ongoing SIU consequence management are the accountability response to past failures.''
The accommodation payment failures represent a breakdown in that delivery capability, which the Department is obligated to fix and is fixing, he said.
Manamela said that the department has committed to reporting back to Parliament on the outcomes of the SIU investigation and monitoring the performance of the new payment system during the 2026 academic year.
IOL News