R54 billion state-run scheme under investigation

A report from the Office of the Public Protector (PP) has exposed rampant misfunding of South African students by the National Student Financial Aid Scheme (NSFAS).

This was revealed during a media briefing on Tuesday, 18 August 2026, by the incumbent Public Protector, Adv Kholeka Gcaleka.

The report, released under Section 7(9) of the Public Protector Act, details the findings of the Public Protector’s investigation into the financial and governance crisis at NSFAS.

“The evidence gathered depicts NSFAS as an institution affected by persistent governance instability, administrative weaknesses and inadequate systems,” Gcaleka said.

“These deficiencies have impaired its ability to discharge its statutory mandate effectively, efficiently, and in a manner consistent with the standards expected of a public entity entrusted with public funds and vulnerable beneficiaries.”

Hundreds of thousands of students depend on NSFAS for funding, with the scheme having approved funding for an estimated 660,000 students in 2026 alone.

The report revealed, among other things, that R5.1 billion in improper funding had been distributed to approximately 40,000 students across 76 higher education institutions.

Additionally, students owed a collective R601,000 by NSFAS in unpaid tuition, with this only being paid out following intervention by the Public Protector.

“The non-completion of the Close-Out Project has caused substantial prejudice to students whose qualifications remain withheld due to unresolved accounts,” Gcaleka said.

“Although these students have completed their studies, the withholding of certificates limits their ability to access employment, pursue further studies and participate meaningfully in the labour market.”

In May, Minister of Higher Education and Training Buti Manamela placed the scheme under its third administration in eight years, appointing Prof Hlengani Mathebula as administrator.

At the same time, Manamela dissolved the seven-member NSFAS Board, citing legal concerns around the board’s structure following multiple board member resignations in 2025.

The members of the Board approached the Pretoria High Court to have Manamela’s decision overturned, with the Court ruling on 14 August that his dissolution of the Board was irrational.

The seven Board members were reinstated to their previous positions, and Mathebula’s appointment as administrator of NSFAS was suspended.

NSFAS issues a response

In a statement released on 20 August, the members of the NSFAS Board acknowledged the release of the Public Protector’s report.

The Board pointed out that the Public Protector’s investigation, and therefore its subsequent findings, commenced in 2021 and thus predated the current NSFAS Board’s appointment.

Additionally, the Board revealed that the finding regarding the improper funding of 40,000 students was not new information.

Rather, this information was sourced from an investigation by the Special Investigating Unit (SIU) under Proclamation R88 of 2022, which examined the period between 1 April 2016 and 26 August 2022.

“These findings predate the current Board’s tenure and have been a central focus of the Board’s remedial work since its appointment,” the NSFAS Board said.

“The NSFAS Board is grateful that the PP’s report has brought continued visibility to these historical challenges and embraces the opportunity to account for them transparently.”

The current Board said it received the SIU’s report upon taking office in February 2025, and subsequently incorporated its findings into its turnaround strategy for NSFAS.

Of the R5.1 billion which had been allocated to students who did not qualify, the Board pointed out that more than R2 billion had already been recovered by the SIU to date.

The Board also acknowledged the influence of the Auditor-General of South Africa (AGSA) in the Public Protector’s report.

NSFAS received a disclaimer audit opinion from the AGSA on its 2024/25 financial statements, with 66 major audit findings and 115 overdue internal audit findings flagged.

“The Board is pleased to report that the AGSA has expressed satisfaction with the remedial actions it has taken to date,” the NSFAS Board said.

“This progress would not have been possible without the constructive oversight and guidance it received from the AGSA, and extends the same spirit of openness and cooperation to the PP.”

The Board said that since its appointment, it had raised NSFAS’s organisational performance from 40% over five years to 64% during the 2025/26 financial year.

It said it would continue to cooperate with the Public Protector, the SIU, the AGSA, the Department of Higher Education and Training, and other stakeholders to restore governance to NSFAS.