Critical R54 billion state institution collapsing in front of everyone’s eyes

The National Student Financial Aid Scheme (NSFAS) has been placed under administration in an attempt to restore stability to the state-owned institution.

NSFAS provides financial assistance to university and college students in South Africa, and is funded by the Department of Higher Education and Training.

Despite receiving an annual budget of over R54 billion from the South African government, the institution is fraught with governance failures and financial issues.

The Auditor-General of South Africa (AGSA) recently issued a disclaimed audit opinion on NSFAS’s financial statements for the 2024/25 financial year, after the institution submitted its results late.

This is the worst audit opinion that the AGSA can issue, as it means NSFAS’s financial statements were deemed unreliable and not based on credible figures.

The AGSA cited material irregularities and issues of non-compliance as reasons for the disclaimed opinion, such as NSFAS reportedly paying over R200 million to non-eligible students.

This, along with a multitude of other concerns, led the Minister of Higher Education and Training Buti Manamela to place NSFAS under administration.

“NSFAS is one of the most important public institutions in our democratic project,” Manamela said. “It exists to ensure that young people from poor and working-class backgrounds are able to access higher education and training.”

“For many families, NSFAS is not an abstract institution. It is the difference between exclusion and opportunity, between hope and despair.”

The decision was announced during a media briefing on 4 April 2026, and follows the resignation of multiple members of NSFAS Board, including chairperson Mugwena Maluleke.

Manamela cited legal concerns around the structure of the NSFAS Board as the issue that prompted his department to approach the courts about the administration.

He also said previous attempts to stabilise the Board through interim appointments and vacancy filling had been unsuccessful.

“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 future of millions of students.”

Following the announcement of the administration, Manamela dissolved the current NSFAS Board and appointed Hlengani Mathebula as the new administrator of NSFAS.

Mathebula currently serves as the Director and Head of the Tshwane School for Business and Society at the Tshwane University of Technology.

He has previously held positions in various government and other institutions, including the South African Reserve Bank and the South African Revenue Service.

Administration not the answer

The decision to place NSFAS under administration has drawn much criticism from stakeholders across the higher education sector.

This is the third time the institution has been placed under administration over the last decade, with the first being in 2018.

Randall Carolissen served as administrator of NSFAS from August 2018 to December 2021, while Freeman Nomvalo held the position between April 2024 and February 2025.

The latest administration announcement received backlash from the National Education, Health and Allied Workers’ Union (NEHAWU).

In a statement made available to The Bulrushes, the union said it had not been properly consulted by the Department of Higher Education on the administration decision.

“Had the minister consulted NEHAWU, we would have shared our experiences with previous administrators of the scheme,” NEHAWU said.

“In fact, the scheme finds itself in the current quagmire as a result of previous administrators, who plunged the scheme into a deplorable state of governance and administration.”

NEHAWU acknowledged the challenges faced by NSFAS, but said previous administrators had failed to implement systems to sufficiently correct these.

The union said it had called on Manamela and his department to work closely with all stakeholders, including itself, to restore stability to NSFAS following the Board resignations.

The South African Union of Students (SAUS) also rejected the administration, and said it too had not been properly consulted by the Department of Higher Education.

In a statement, SAUS said NSFAS had shown noticeable improvements in its operations and that while challenges persisted, they did not warrant such an extreme intervention.

“This decision comes immediately after the NSFAS Board took steps to stabilise leadership through the appointment of a Chief Executive Officer,” SAUS said.

“The sudden imposition of an administrator undermines the role of the Board and raises serious questions about what informed this decision and whether institutional governance processes have been respected.”

The Portfolio Committee on Higher Education also said they did not agree with the minister’s decision to place NSFAS under administration.

In an interview with Newzroom Afrika, Committee chair Tebogo Letsie said the Committee does not believe administration is an effective method to rectify NSFAS’s issues.

“In seven years, we’ve effectively had three administrators, three board chairpersons, and two CEOs,” Letsie said. “That shows that there is a problem, which is something we must acknowledge.”

“We are not investigating enough what the problem may be. We need to understand why good leaders who go to NSFAS don’t last at that institution.”