The National Student Financial Aid Scheme (NSFAS) is once again under pressure over unpaid accommodation fees, with private landlords claiming they are owed R62 million for housing students since January 2024.
This growing debt reportedly affects nearly 2,800 student beds across various universities and Technical and Vocational Education and Training (TVET) colleges.
Earlier in the year, the Private Student Housing Association (PSHA), which represents a significant portion of the sector managing more than 80,000 beds, reported R44 million in outstanding payments. That figure has now risen to R62 million, indicating a worsening financial strain.
The PSHA attributes the delays to widespread operational inefficiencies, including data mismatches, unresolved validations, and delays from institutions in confirming accommodation details.
These issues have severely affected service providers, especially smaller and black-owned businesses without access to significant working capital.
The knock-on effects include disrupted maintenance and student support services, defaults on municipal bills and salaries, and stalled development projects. Several providers are even facing possible closure.
In an effort to resolve the crisis, PSHA met with NSFAS on 28 July 2025. During the meeting, led by the scheme’s acting senior manager for student accommodation, NSFAS committed to validating the outstanding arrears and pledged to process payments by the end of the month.
The PSHA warned that if this deadline is not met, it will pursue legal action to recover the debt, which may include applying to attach NSFAS assets and bank accounts to ensure continued accommodation for affected students.
Urban Circle, a private housing provider accommodating students from the University of Johannesburg (UJ) and the University of the Witwatersrand (Wits), has also been impacted.
The owners, Saul Mayers and Rowan Lewis, revealed that NSFAS owes them approximately R14.2 million in unpaid fees from 2024. They noted that while payments made through universities are generally received, direct NSFAS disbursements often fail to materialise.
One of their buildings, housing 134 UJ NSFAS-funded students, has seen no payments from NSFAS, leaving the owners unable to cover operational costs.
Communication from NSFAS has also become inconsistent. While initial messages from the newly appointed board promised payment by specific dates, those updates have since stopped, and the arrears remain unpaid.
Although no official student evictions have been reported so far, PSHA warns that the risk is escalating. Without urgent intervention, accommodation capacity could become dangerously limited in some areas.
Concerns around NSFAS’s operations have also been raised in Parliament. In May 2025, Members of Parliament questioned the scheme’s use of four service providers responsible for accrediting housing properties.
These intermediaries charge landlords a 5% commission on every NSFAS-related transaction, effectively reducing the already-limited rental income for providers.
The PSHA argues that this system has introduced confusion and delays in payments while making it harder for providers to remain financially viable. They continue to call for a direct payment model supported by stringent compliance checks.
Questions about the ongoing crisis, including the potential impact on students, were sent to NSFAS spokesperson Ishmael Mnisi and CEO Waseem Carrim on 31 July 2025. As of 4 August, no response had been received.
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