South Africa Places NSFAS Under Administration as Governance Crisis Deepens

Key facts

• Higher Education Minister Buti Manamela placed NSFAS under administration on Monday.
• NSFAS received a disclaimer audit outcome for the 2024/25 financial year.
• Hlengani Mathebula appointed as NSFAS Administrator; he has over 30 years of experience.
• NSFAS board dissolved after multiple resignations, including the chairperson.
• At least 95% of accommodation providers had banking details verified for 2026 payments.
• Urban Ocean Property Developers director Duan Coetzee said uncertainty may force eviction of 400 students.
• NSFAS manages about R60 billion per year in public funds.

Minister Acts After Years of Instability

Higher Education and Training Minister Buti Manamela placed the National Student Financial Aid Scheme (NSFAS) under administration on Monday, dissolving its board and appointing an administrator to take control of the R60-billion-a-year institution. The decision, announced at a media briefing, follows what Manamela described as a prolonged period of governance challenges, legal concerns, and operational weaknesses that threatened the stability and credibility of NSFAS. Manamela said the move was taken under sections 17A to 17D of the NSFAS Act, 1999, after “careful consideration of the legal, governance, financial and operational circumstances” affecting the institution. “NSFAS is one of the most important public institutions in our democratic project,” he said, adding that for many families it is “the difference between exclusion and opportunity, between hope and despair.” The minister outlined a cascade of failures: a disclaimer audit outcome for the 2024/25 financial year, material irregularities flagged by the Auditor-General, weak consequence management, serious data integrity concerns, unresolved student appeals due to system deficiencies, delays in ICT modernisation, and student accommodation failures affecting dignity and safety.

Board Dissolved After Repeated Resignations

The governance crisis at NSFAS has been building for months. Manamela noted that the legality of the NSFAS Board’s constitution had been questioned, prompting the department to approach the courts through self-review proceedings. “We took this step because government cannot knowingly ignore potential legal irregularities in the constitution of a statutory body entrusted with billions of rands in public funds and the futures of millions of students,” he said. The situation worsened with multiple board resignations, including that of the chairperson, and ongoing disputes related to governance processes and executive appointments. Attempts to stabilise the board through interim appointments and potential vacancy fillings were deemed insufficient, Manamela said. Governance instability was compounded by serious institutional challenges, many of which emerged from NSFAS’s own reports, engagements, governance records, and responses to the department. The minister said the intervention was necessary after repeated attempts to stabilise the entity fell short.

New Administrator Brings Decades of Experience

Manamela appointed Hlengani Mathebula as NSFAS Administrator. Mathebula brings over three decades of experience across public and private sectors, including roles in governance, financial management, regulatory and institutional leadership. He currently serves as Director and Head of the Tshwane School for Business and Society at the Tshwane University of Technology and has held professorial and Senate leadership responsibilities within the university sector. He has also served in executive and governance positions at the South African Reserve Bank, the South African Revenue Service, and on the boards of several public and private entities. The appointment is effective immediately, with Mathebula tasked to restore stability and address the systemic failures identified by the minister.

Accommodation Providers Face Unpaid Bills and Eviction Risk

The administration announcement has deepened uncertainty for accommodation providers already under severe financial strain. Duan Coetzee, director of Urban Ocean Property Developers, said: “I was shocked to hear this news today. We do not know what this means for us yet. What do we do – put 400 kids out on the streets?” He added: “We now know we will not be paid, at least any time soon. This is extremely serious.” Just days before the announcement, NSFAS had insisted in written responses that its accommodation payment system was functioning and that outstanding claims were being addressed. The scheme said it had implemented an intervention to verify and resolve unpaid accommodation claims, involving its student accommodation unit, core business operations, and ICT teams. It stated that “all the invoices have been received and have been verified”, with mop-up payments already processed for 2024 and 2025 claims. NSFAS also attributed ongoing delays to administrative and institutional factors, including late student confirmations by universities, incorrect classification of accommodation allowances, and students being placed in unaccredited housing. The scheme said at least 95% of accommodation providers had now had their banking details successfully verified and were included in its direct payment system for 2026. But providers in Gauteng say those assurances bear little resemblance to their experience.

R60 Billion Institution Plagued by Systemic Failures

NSFAS is one of South Africa’s most critical public institutions, disbursing about R60 billion annually to support students from poor and working-class backgrounds. Yet it has never functioned properly, according to critics. The disclaimer audit for 2024/25 is the latest in a series of financial reporting failures that have eroded trust. The Auditor-General identified material irregularities, and the department flagged weaknesses in consequence management, data integrity, and ICT modernisation. Student appeals remain unresolved largely due to system deficiencies, and accommodation failures have affected student dignity and safety. These issues, Manamela said, threatened the stability and credibility of the scheme. The minister acknowledged that governance instability was compounded by serious institutional challenges, many of which emerged from NSFAS’s own reports and engagements. The decision to place the scheme under administration was taken after consultations and consideration of alternatives.

What Comes Next for Students and Providers

With NSFAS now under administration, the immediate priority is to stabilise payments and prevent student evictions. The administrator, Hlengani Mathebula, will have broad powers to address governance, financial, and operational weaknesses. However, the timeline for resolving the payment crisis remains unclear. Accommodation providers warn that without prompt payment, they may be forced to evict students. The DA has urged Manamela to answer for the governance crisis, saying students are caught in the crossfire. The parliamentary committee on higher education has demanded an end to NSFAS instability. The appointment of a third administrator in recent years underscores the depth of the crisis. Manamela said the intervention was necessary to restore credibility and ensure that NSFAS fulfils its mandate. But for thousands of students and providers, the immediate question is whether the new administrator can deliver what previous efforts could not: reliable funding and functional systems.

The bottom line

• NSFAS has been placed under administration with its board dissolved, marking the third such intervention.
• A disclaimer audit for 2024/25 and material irregularities from the Auditor-General highlight deep financial mismanagement.
• Hlengani Mathebula, a veteran of the South African Reserve Bank and SARS, is appointed as administrator.
• Accommodation providers face unpaid bills, risking eviction for thousands of students.
• NSFAS had assured providers payments were being processed, but providers say the reality is different.
• The crisis threatens the education of millions of students reliant on the R60-billion scheme.