EFF Member of Parliament Siykhle Lonzi expressed serious concern over the National Student Financial Aid Scheme (NSFAS) continuing to use private companies to manage student accommodation payments, despite public assurances that this function was transitioned to internal management at the beginning of 2026. Lonzi warns that maintaining these commissions could result in annual government budget expenditures exceeding 220 million rand.
Information presented during an inspection of NSFAS offices revealed that four partner companies for 'accommodation resolution' continue to perform student placement functions on behalf of the scheme. This is causing concern because NSFAS and the Department of Higher Education had previously informed the public about the completion of the previous system and the transfer of this function internally.
Lonzi highlighted the significant financial implications of this situation. He stated that in 2024, NSFAS confirmed processing approximately 2.9 billion rand in accommodation payments through the intermediary system, which resulted in the collection of about 145 million rand in commissions. Furthermore, according to Lonzi, within a single payment cycle in 2026, NSFAS paid housing providers over 1.1 billion rand.
The deputy called for an explanation as to why limited student funding continues to be channeled through intermediary schemes. Lonzi sent a letter to the Minister of Higher Education, Buti Manamale, demanding detailed information on the four companies that contracted to perform student accommodation-related functions on behalf of NSFAS. He insists on receiving the full legal names of these companies, confirmation of their valid Financial Services Provider (FSP) licenses, and clarification of the legal or regulatory basis allowing them to conduct financial operations on behalf of NSFAS without such a license.
In addition, Lonzi requested several pieces of data: information on the functions the companies currently perform; the total amount paid to each provider since the start of the contract; the total volume of accommodation payments processed by each company; and clarity on whether the contracts were terminated, amended, or extended, including relevant documentation and effective dates. Lonzi noted that funds spent on unnecessary commissions could have been used to support students struggling with housing and funding. He stated that every rand spent on unnecessary intermediary schemes could have been invested directly in supporting poor and working students in South Africa, and Parliament has the right to know exactly how much public money has been lost through this scheme and whether its continued existence can be justified.
The University of South Africa (Unisa) has refuted the assertions made by the National Student Financial Aid Scheme (NSFAS) claiming that internal technical difficulties at the university led to delays in the disbursement of July student allowances. Unisa maintains that the disruption stems from wider systemic issues rather than any shortcomings within the university itself.
These conflicting narratives have renewed worries regarding the management of student financing, especially since over 93,000 students supported by NSFAS awaited their monthly Personal Care Allowance. In a statement released on Thursday, NSFAS indicated that it transferred the necessary funds to Unisa on July 2nd after finalizing reconciliation procedures, placing the responsibility for distribution with the university.
NSFAS attributed the payment delays to technical system challenges encountered during Unisa's payment cycle, stating that these issues were resolved by July 6th and that outstanding payments were being finalized. Based on data provided by Unisa, approximately 93,093 students were impacted. NSFAS noted that some recipients had already received their funds, while others were scheduled to be paid that week.
However, Unisa strongly disagreed with this explanation. Prior to NSFAS issuing its statement, acting chief financial officer Liana Joubert informed SABC News that the university had started processing payment batches the preceding Friday and that every qualified student had received their remittance advice. Joubert emphasized that the problem was 'predominantly not a Unisa issue,' characterizing it instead as a 'systemic issue rather than a Unisa issue,' while asserting that the university managed the process 'exceptionally well from our side.'
As South Africa's largest distance-learning institution, Unisa enrolls over 380,000 students, roughly 177,000 of whom receive NSFAS funding. Joubert pointed out that the sheer size of the institution complicated payment processing. The university insisted it faced no technical hurdles in handling the allowances.
Following a meeting with Higher Education and Training Deputy Minister Yusuf Cassim on Thursday, Unisa reported that 98.2% of eligible NSFAS-funded students had received their allowances. The university stated clearly, 'Importantly, Unisa experienced no technical challenges in processing NSFAS allowance payments.' They detailed that NSFAS transferred the funding on July 2, 2026, and Unisa began processing payments within 24 hours, successfully processing allowances for over 95,000 students between July 3rd and 7th.
Unisa explained that the remaining 2% of unpaid cases were mainly due to administrative and eligibility matters, such as incorrect or missing bank details, failed bank verification, duplicate registrations, and pending NSFAS eligibility confirmations. The university added that deposit timing relied on individual banks after payment instructions were processed, confirming they completed the process within the seven-working-day period agreed upon with NSFAS.
The payment disagreement prompted Cassim's initial official visit to Unisa's Muckleneuk campus in Pretoria, following numerous complaints directed to the Deputy Minister's Helpdesk. During this meeting, Cassim engaged with student representatives and university management to review the divergent accounts and discuss improvements to the payment procedure.
Joubert also addressed the financial strains on the university, noting that Unisa recorded a R106 million deficit in 2025 because it disbursed more funds to students than it received. Looking forward, she mentioned receiving R733 million from NSFAS in March 2026 but paying out R907 million to guarantee students timely access to learning materials, which is projected to create an additional R213 million deficit. Much of this financial pressure, according to the university, originates from a long-standing disparity in funding between distance-learning and contact institutions.
Unisa students receive an average annual allowance of around R9,000, contrasting sharply with the approximately R48,000 received by students at contact universities. Furthermore, the university receives only R316 per student to manage the allowance system. Joubert clarified, 'We are not blaming NSFAS but are keen to work closely with them to synchronise payments. We can only disburse funds once they are received.'
NSFAS confirmed that it currently supports 168,480 Unisa students through its Book Allowance program, valued at R425.6 million, and 93,910 students via the Personal Care Allowance program, amounting to R148.6 million. Unlike students at traditional universities, Unisa students do not receive meal allowances; instead, eligible students receive support through book, study material, and Personal Care Allowances.
NSFAS expressed understanding of the concerns of affected students and affirmed its close collaboration with Unisa to ensure all eligible beneficiaries receive their allowances promptly. Meanwhile, Unisa advised students who had not yet received payments to check their NSFAS funding status, verify their banking information, and confirm submission of all necessary documents, reiterating the university's commitment to professionalism, accountability, and transparency.
The University of South Africa (Unisa) refutes the explanations provided by the National Student Financial Aid Scheme (NSFAS) regarding July stipend payment delays, insisting that the disruption was caused by broader systemic problems rather than errors on the university's part.
Conflicting accounts have cast doubt on responsibility for the delays affecting over 93,000 students receiving funding from NSFAS and awaiting monthly living allowances. In a statement released on Thursday, NSFAS reported that it transferred the necessary funds to Unisa on July 2nd after completing reconciliation procedures, and that the responsibility for distributing the grants then lay with the university.
According to NSFAS, some students experienced delays due to technical issues in Unisa's payment process. The fund stated that these issues were resolved on July 6th, and outstanding payments are being finalized. Data presented by Unisa indicates that approximately 93,093 students were affected. NSFAS clarified that some beneficiaries have already received their grants, and the remaining students were promised payments within a week.
However, Unisa disagrees with this version. Several days before the NSFAS statement was published, Chief Financial Officer Liana Jobert told SABC News that the university had begun processing payment batches last Friday, and all eligible students had been notified of the transfer. Jobert emphasized: 'This is predominantly not an Unisa problem. Of course, it is a systemic issue, not an Unisa problem, but we managed the process exceptionally well on our end.'
Unisa, which has over 380,000 students, including about 177,000 funded by NSFAS, noted that processing payments at the largest distance learning institution in South Africa is a complex undertaking due to the scale of its student body. Jobert's statements sharply contrast with NSFAS's explanation. While the university attributes the fault to wider systemic difficulties, NSFAS claims the cause was technical complications in Unisa's payment process.
The dispute intensified during the first official visit of the new Deputy Minister of Higher Education and Training, Yusuf Kassim, to the Muckleneuk campus in Pretoria on Thursday. Kassim met with student leaders and university management to assess conflicting information regarding payment delays following numerous complaints received via the Deputy Minister's Hotline. During the meeting, university officials detailed the payment process and the factors behind the delays.
Kassim stated that the priority is resolving student issues through constructive engagement, rather than assigning blame. He noted: 'We are here to listen and address the frustrations expressed by students regarding their experience through existing institutional channels.'
During the meeting, Jobert highlighted the financial pressure the institution is under. She reported that in 2025, Unisa recorded a deficit of 106 million rand after paying students more than it received. Jobert added that 'this discrepancy will require thorough review by audit committees.'
Looking ahead, Jobert mentioned that in March 2026, the university received 733 million rand from NSFAS but spent 907 million rand to ensure timely access to study materials for students, which is expected to result in an additional deficit of 213 million rand. She explained that much of the financial strain is related to a long-standing policy gap between funding for distance and contact learning. According to Jobert, Unisa students currently receive an average annual allowance of about 9,000 rand, compared to approximately 48,000 rand for students attending contact universities. Furthermore, the institution receives only 316 rand per student for administering the grant system, which she called an insufficient amount. She stressed: 'We are not blaming NSFAS, but we are interested in close collaboration with them to synchronize payments. We can only disburse funds after receiving them.'
Following the meeting, Unisa issued a statement indicating that 98.2% of eligible NSFAS-funded students have received their grants. The remaining 2% of unpaid cases are mainly linked to administrative and compliance issues, including incorrect or missing bank details, failed bank verification, duplicate registrations, and unconfirmed NSFAS requirements. The university stated: 'It is important to note that Unisa did not encounter technical difficulties in processing NSFAS grant payments.'
The university also provided details of the process: 'NSFAS transferred the funds to the University on July 2, 2026. Within 24 hours, on July 3, Unisa began processing payments, and from July 3 to July 7, successfully processed grants for over 95,000 students.' The university added that after processing payment instructions, the time for funds to be credited to student accounts depends on individual bank processing times. It confirmed that the payment process was completed within the seven-day period agreed upon with NSFAS.
NSFAS reported that it is currently funding 168,480 students through a textbook program worth 425.6 million rand and 93,910 students through a living allowance program valued at 148.6 million rand. Unlike students at contact universities, Unisa students do not receive meal allowances; instead, eligible students receive support through book and material allowances, as well as living allowances. NSFAS expressed understanding of the concerns of affected students and continues close engagement with Unisa to ensure prompt receipt of grants by all eligible beneficiaries.
