NSFAS Disbursement Errors Cause Student Evictions and Financial Turmoil in South Africa

NSFAS Disbursement Errors Cause Student Evictions and Financial Turmoil in South Africa. In recent weeks, a storm has erupted around the National Student Financial Aid Scheme (NSFAS) due to disbursement errors that have left many TVET college students facing evictions and financial instability. The fallout from these errors is not just a matter of confusion; it’s a reflection of systemic cracks in the student funding framework that affect thousands of young South Africans striving for a better future through education.

Disbursement Mistakes Create Chaos

The issue started when NSFAS disbursed R13,800 to some students on 4 April 2025, intended to cover both allowances and accommodation costs. However, a significant portion of these funds — R10,800 was specifically earmarked for student accommodation. According to NSFAS spokesperson Ishmael Mnisi, the problem stemmed from a “misunderstanding” between NSFAS, TVET institutions, and students.

Instead of the funds reaching eligible and verified students, they were mistakenly sent to some individuals who had not yet been confirmed as qualified. This administrative blunder not only undermined the credibility of NSFAS but also triggered a ripple effect of evictions and delayed rent payments, especially in communities where landlords rely on consistent student rental income.

Why NSFAS Doesn’t Pay Landlords Directly

A burning question remains: Why does NSFAS not pay landlords directly, especially when dealing with vulnerable students and accommodation agreements?

Mnisi explained that TVET colleges lack the necessary infrastructure to manage direct landlord payments efficiently. By paying students directly, NSFAS aims to promote financial inclusion and reduce administrative strain on colleges. However, this system assumes that all students will use the funds responsibly — an expectation that has not always held true.

The direct-to-student payment model, although well-intentioned, often leads to delays in rent, confusion among landlords, and in worst-case scenarios, forced evictions. Students are urged to honour their accommodation agreements and pay their landlords once the funds have been received.

TVET Students Hit the Hardest

The TVET sector which serves many students from rural and low-income backgrounds has borne the brunt of these issues. One of the most concerning incidents was reported at the Waterberg TVET College in Lebowakgomo, where several students were evicted for failing to pay their accommodation fees.

According to Mahlako Phasha, the college’s spokesperson, some students did receive their NSFAS payments but chose not to settle their accommodation dues. “A few students submitted proof of payment as per the NSFAS circular to the College’s Student Support Services,” she added.

The situation highlights a major disconnect between student funding, institutional processes, and landlord agreements, which urgently needs addressing to prevent further disruptions in students’ lives and education.

Accommodation Allowance Caps and Financial Realities

Under current NSFAS policy, TVET students’ accommodation is subject to a cap of R33,000 per annum. For private accommodation, the allowance is higher — R52,000 per year for students in metropolitan areas and R42,640 per year for those in non-metro locations. These caps are meant to ensure equitable distribution of resources, but they also mean that students and landlords must carefully budget within those limits.

The mistake in disbursing R13,800 without proper verification has not only led to financial mismanagement but also exposed students to housing insecurity, particularly those who are genuinely reliant on the NSFAS accommodation allowance to secure shelter during their studies.

NSFAS Calls for Urgent Rectification

In response to the unfolding crisis, NSFAS has urged all students who received the R10,800 accommodation allowance to settle their debts with landlords immediately. They have reiterated that students are aware of their monthly allowance structure and that misuse of these funds could jeopardise future support.

Furthermore, NSFAS is working with its “solution partners” intermediaries who facilitate the relationship between the scheme and educational institutions — to update eligibility lists. These partners play a vital role in verifying which students qualify for accommodation and transport support, but delays in confirmation have compounded the problem.

What Needs to Change?

To prevent similar issues in the future, several changes should be considered:

1. Improved Verification Systems: NSFAS must implement more robust systems for confirming student eligibility before disbursing funds.
2. Direct Payments to Landlords: While infrastructure may be lacking, establishing a pilot system for direct landlord payments could reduce evictions and financial misuse.
3. Financial Literacy for Students: Educating students on how to manage their NSFAS funds responsibly is crucial.
4. Stronger Collaboration with Institutions: Regular and real-time communication between NSFAS, colleges, and landlords can close gaps in the system.

Conclusion

The recent NSFAS disbursement error is a wake-up call for the entire student funding ecosystem in South Africa. While the intention behind NSFAS remains noble — to support economically disadvantaged students in accessing tertiary education the execution needs urgent reform.