South Africa’s government-funded student financial aid scheme has reached a breaking point, not because of a single scandal or leadership dispute, but because it has lost the most basic ability required of any public institution: the ability to account for itself.
The Auditor-General’s findings on the National Student Financial Aid Scheme (NSFAS) lay bare a system in crisis. At the centre is a devastating audit outcome – a disclaimer of opinion for the 2024-25 financial year, the most severe result an institution can receive.
In plain language, this means the state cannot say with confidence how billions of rands [at present, the rand – ZAR1 – is equivalent to about US$0.061] intended to support poor and working-class students have been managed, highlighting a serious breakdown in trust.
Why government acted
On Monday 4 May 2026, Higher Education and Training Minister Buti Manamela announced the decision to place NSFAS under administration.
“NSFAS is one of the most important public institutions in our democratic project ... For many families, NSFAS is not an abstract institution – it is the difference between exclusion and opportunity, between hope and despair,” he said.
It is precisely because of this centrality that failure at NSFAS reverberates far beyond the institution itself. Manamela cited delays in ICT modernisation and systems integration, data integrity concerns, and unresolved student appeals, which were substantially caused by system deficiencies and weaknesses in consequence management, as the basis for the decision. It followed several resignations, including that of interim board chairperson Dr Mugwena Maluleke.
Against this backdrop, the minister invoked sections 17A to 17D of the NSFAS Act to place the scheme under administration – dissolving the board and appointing an administrator to take full control. The decision, he said, was not taken lightly, but followed “a prolonged governance and operational crisis” and the exhaustion of alternatives.
At that point, the central question was no longer whether the board could function, but whether NSFAS, itself, was operating “effectively, sustainably, and credibly”.
The answer, increasingly, was no.
Tense welcome for Mathebula
The credentials of academic Professor Hlengani Mathebula, whom Manamela named as administrator, have been called into question. Mathebula left the South African Revenue Service under a cloud in 2019 pending a precautionary suspension, amid governance breakdown at the tax authority.
In a baptism of fire on Tuesday (5 May), Mathebula faced a tense Parliamentary Portfolio Committee on Higher Education meeting, at which members questioned him about who was in charge of the entity. Mathebula said he would serve as administrator and CEO. Still, acting CEO Waseem Carrim, who has been acting CEO since 5 March 2025, was also present at the meeting in the National Assembly at Mathebula’s request.
One politician laughed at having two CEOs from one organisation present. Carrim was accused of “tip-toeing” around the key issues and seemed out of his depth in parliament, as he has been in the role since his appointment.
When oversight collapses
The Auditor-General describes a system marked by deepening breakdowns in governance, financial controls and accountability. Financial records are incomplete. Transactions cannot be verified. Large volumes of data are unsupported. For a scheme that funds hundreds of thousands of students and moves billions of rands annually, this is not just concerning – it is untenable.
If the audit outcome is alarming, the underlying findings are even more so.
The Auditor-General’s data analysis revealed that 822 beneficiaries listed as deceased continued receiving funding; more than 14,000 students above the income threshold were funded; hundreds were double-dipping through NSFAS and social grants; and tens of thousands did not meet eligibility or academic requirements but remained funded.
These are not isolated anomalies. They reflect a system where verification processes have broken down – where controls meant to protect public funds have failed.
Chairperson of the portfolio committee Tebogo Letsie said in parliament on 6 May 2026 that financial institutions must place a hold on large deposits from NSFAS, just as they flag overseas deposits, until a reason for the transaction is provided.
“First thing we must fix at NSFAS if we want to get it right, is the ICT system,” he said.
The consequences of system breakdown mean that funds meant for the most vulnerable students are being diverted – through error, misrepresentation or fraud.
Letsie alluded to syndicates running NSFAS, allegedly paying ghost students, highlighting the need for intervention to ensure the student funding body operates effectively.
Billions without certainty
The Auditor-General has repeatedly flagged irregular expenditure running into tens of billions of rands, with warnings that the true scale may be even higher due to incomplete disclosures.
In previous audits, NSFAS was unable to reconcile billions owed to and by institutions, highlighting deep systemic weaknesses in financial management.
The human cost
Behind every audit finding is a student: A student waiting weeks – or months – for an allowance, a student unable to register because funding has not been confirmed, a student living in unsafe or undignified accommodation.
While funds are misallocated or poorly tracked, those who depend on NSFAS for survival bear the consequences.
This is the paradox at the heart of the crisis: a system designed to expand access to higher education is undermining it.
A crisis years in the making
Perhaps the most troubling aspect of the Auditor-General’s findings is their familiarity.
For years, audits have pointed to weak internal controls, poor data integrity and inadequate consequence management.
Yet reforms have been slow, partial or ineffective. The result is cumulative: a system in which governance failures compound over time until they produce institutional collapse.
In its submission to the committee, NSFAS said numerous CEOs and administrators were nominally in charge but lacked the authority to overhaul broken systems and turn the institution around. They inherited a hollowed-out institution with power distributed elsewhere – in the board, DHET, unions, and service providers (captured).
Incoming boards and chief executive officers have often operated under substantial pressure to “fix NSFAS fast” or to implement urgent, politically driven directives. Rather than being afforded the time and stability required to assess the organisation’s challenges and implement sustainable reforms, many leadership teams were handed unrealistic mandates and expected to deliver immediate results. This environment created conditions where failure became almost inevitable, with leaders subsequently held responsible for systemic issues that predated their tenure.
The dysfunction became entrenched over time, with NSFAS operating in a state of crisis. Senior leadership, including CEOs and executive managers, were routinely diverted from strategic priorities to address urgent operational breakdowns occurring simultaneously across multiple fronts. This reactive environment hindered long-term planning, contributed to staff burnout, and undermined the institution’s capacity to implement sustainable reforms.
What comes next
Political parties and critics targeted the minister’s decision, including a threat by a board member to file a court interdict, dismissing claims of maladministration. However, at the time of writing, the minister’s office said it had not received a court challenge.
Administration offers an opportunity – but it is not a guarantee.
Placing NSFAS under administration may stabilise governance, restore controls and rebuild trust. But, without sustained accountability and systemic reform, it risks becoming yet another cycle of intervention without lasting change.
The real test will not be whether NSFAS improves its audit outcome next year, but whether students experience a system that is reliable, fair and functional.
This is also the message from Universities South Africa (USAf), which represents all public universities. It has welcomed the minister’s assurance that the disbursement of student funding and allowances will be disrupted during the period of administration.
But, at the same time, USAf has said it looks forward to contributing constructively to the broader national dialogue on the long-term sustainability, governance, and effectiveness of the student financial aid system, recognising that meaningful reform will be essential to ensuring that NSFAS can fulfil its transformative mandate in a coherent, accountable, and enduring manner.
USAf said, although the measure might be needed to stabilise the scheme, placing NSFAS under administration did not address its deeper weaknesses.
“The challenges confronting NSFAS are indicative of serious structural deficiencies in the design, governance, and implementation of the country’s student financial aid system,” said USAf.
According to USAf, a comprehensive and systemic review of the student funding model in South Africa was needed.
“Without such a fundamental overhaul, the higher education sector risks remaining locked in a reactive cycle of crisis management, which ultimately undermines institutional stability and, most critically, disadvantages the very students whom NSFAS is intended to support, as well as the universities that depend on its effective functioning,” USAf noted.
This was published on University World News Africa site.