The viability of South Africa’s National Student Financial Aid Scheme (NSFAS) faces intense scrutiny as parliamentary testimony reveals persistent administrative failures, unresolved allegations of political interference, and mounting pressure to fundamentally restructure how student funding is delivered.
Mlamuli Hlatshwayo of North-West University told stakeholders that repeated leadership interventions have not resolved NSFAS’s systemic challenges. He noted the entity has now been placed under administration three times, yet continues to grapple with governance deficiencies, board incompetence, financial mismanagement, and consistently adverse audit outcomes.
“Over 70 billion that went missing and that is unaccounted for within the NSFAS budgetary allocations,” Hlatshwayo stated, underscoring the scale of financial irregularities. He highlighted the direct impact on vulnerable students: those subjected to “gap investigations” experience funding suspensions lasting three to six months, leaving them without stipends, allowances, or basic support.
“These students now [face] food insecurity, hunger, homelessness,” Hlatshwayo said, describing accounts of students squatting in computer labs and lecture halls. He emphasized the toll on mental health and academic performance, arguing NSFAS as an organization should face criminal liability for what he termed “organized dysfunctionality.”
Parliamentary Hearing Exposes Conflicting Accounts
Testimony before the Portfolio Committee on Higher Education brought these concerns into sharp focus. Former NSFAS board members alleged that Higher Education Minister Buti Manamela sought to influence the appointment of the scheme’s Chief Executive Officer during an April meeting in Johannesburg, which they characterized as procedurally irregular.
One board member testified: “He was convinced that there is an instruction that he needed to give to us as members of the board and that our processes should be posted pending that instruction… I felt and I think it was a feeling that we shared with colleagues post that engagement that the minister’s interaction with us could not have been a normal lawful interaction between the executive authority and a member of a board of an entity.”
Minister Manamela categorically denied the allegations. “In no way in any of my decision did I seek to influence that a particular individual should be appointed as the CEO of the NSFAS to the board itself or to any of its members,” he stated, distinguishing between the board’s recruitment process and his constitutional duty to ensure the entity’s proper functioning.
Committee members raised procedural concerns about the absence of official minutes from the disputed April meeting. An EFF representative emphasized that “administrative justice is very clear that when you exercise public power, we ought to have a public record,” noting that diametrically opposed accounts from the minister and former board members create a “constitutional quagmire” where “someone is lying.”
The inquiry also examined the reduction in board resignations—from 18 to 7 members—prior to the board’s dissolution. Questions were raised about potential links between these resignations and threats of collective resignation, though Minister Manamela denied any role: “I deny any involvement in the resignation of any of the board members.”
A pending court case will determine whether the NSFAS board was legally constituted and able to meet quorum requirements at the time of key decisions. Committee members cautioned against premature conclusions, stressing the need to first establish what governing legislation requires regarding quorum, and urging “amicable solutions” to avoid protracted institutional conflict.
Proposed Alternative: Direct Disbursement Model
Hlatshwayo clarified that his call to dissolve NSFAS targets the organizational structure, not the principle of state-funded student support. “The idea that poor and working-class students need to be financially supported by the state… is a public good. That is a moral and socially just good that the state has an ethical obligation to do. So that needs to continue.”
He proposed that the Department of Higher Education and Training and National Treasury assume direct responsibility for fund disbursement, leveraging their existing capacity, expertise, and oversight infrastructure. Support from SARS and law enforcement agencies, he argued, would strengthen verification processes and combat fraud.
“Treasury, together with SARS, they’ve got access to our financial records, to our tax records. They can do better credit checks and affordability mechanisms way better than NSFAS as an entity,” Hlatshwayo explained. He also highlighted the need to address “accommodation cartels” and corrupt actors exploiting the current system.
To minimize disruption during transition, Hlatshwayo recommended a phased, cohort-based rollout: initially routing funds through Treasury and the Department for first- and second-year students, then gradually expanding to other cohorts over a two-year period. This approach, he argued, would allow for system testing while maintaining support for vulnerable learners.
When asked whether incremental reforms could salvage the current structure, Hlatshwayo expressed deep skepticism. “Since the early 2000s we’ve had about three different administrators. I’m not entirely sure I understand the stability that they brought into this organization,” he said, calling instead for “bold solutions” and “brave solutions” to address what he views as irreparable institutional flaws.
He stressed that law enforcement involvement is critical to restoring public trust: addressing accommodation fraud, unqualified beneficiaries, and corruption involving funding officers and NSFAS staff. “That law enforcement capacity is necessary to assist us to gain the public trust and the integrity that is required,” Hlatshwayo concluded, reaffirming that protecting equitable access to higher education remains a vital national priority worthy of structural innovation.