The Minister of Higher Education, Buti Manamela, admitted that the process of providing NSFAS loans for students categorized as 'missing-middle' is too slow and insufficiently effective, despite an increase in applications.
The National Council of Provinces (NCOP) served as a platform where deputies questioned the minister regarding delays in funding through the NSFAS scheme for this group. It was noted that the number of eligible applicants who convert into actual loans remains low.
Manamela presented statistics showing that in 2026, over 53,575 applications were submitted for NSFAS loans by students whose income exceeds the NSFAS scholarship threshold but who cannot afford higher education. However, only 3,102 applicants were assessed as meeting the criteria.
The Minister stated that the NSFAS lending scheme was launched in 2024 to support students in this price bracket. The initial capital of the scheme amounted to R3.8 billion, including R1.5 billion from the National Skills Fund and R2.3 billion from sector training and development agencies.
In 2025, NSFAS received 10,186 applications and approved 2,686. For 2026, the number of applications rose to 53,575, with 3,102 applicants passing the eligibility assessment.
Manamela emphasized that the process involves several distinct stages: application submission, eligibility decision, signing of the loan agreement, and actual disbursement of funds. He noted that while the increase in applications is encouraging, converting eligible applicants into completed and disbursed loans remains too low and slow.
Reasons for the slowdown include unsigned institutional memoranda of agreement, finalization of loan contract forms, qualification and document verification, and timely submission of registration information by educational institutions. Although several institutions have signed the necessary agreements, engagement with remaining institutions is ongoing.
The Ministry and NSFAS are taking corrective measures to finalize incomplete contractual instruments and institutional agreements, as well as to reconcile the status of applications and payments for the period 2024 to 2026 and improve communication with students and educational institutions. Furthermore, the department is reviewing the application process and eligibility criteria to simplify the procedure for qualified students.
Manamela stated that although the government has created a financing tool for the 'missing-middle,' demand for it has increased, but it has not yet reached planned operational maturity or reach.
He added that the priority is to more quickly convert eligibility into actual funding while broader work continues on a stable and sustainable student financing model.
Deputy Mokle also raised the issue of the government conducting a feasibility study on the long-term sustainability of higher education funding, especially considering the rising cost of student living expenses and competing needs of 'missing-middle' students. Manamela reported that the issue of student funding sustainability is under review. He clarified that the information presented did not contain feasibility study data after 2017.
Instead, he stated that the government needs to consider a broader funding model that protects scholarship support for poor and working students while improving lending for the 'missing-middle.' This model must account for financial accessibility, projected growth, real cost of tuition and living, income verification, institutional administrative capacity, as well as fair lending and repayment terms.
Manamela confirmed that students meeting the NSFAS scholarship criteria should continue to receive support under this scheme. For students who do not meet standard scholarship criteria, options such as NSFAS loans for the 'missing-middle,' university financial aid, and professional scholarships are possible. He mentioned that the National Skills Fund has allocated approximately R1 billion for postgraduate and tertiary students.
The Minister noted that various support measures exist for students not covered by NSFAS or the 'missing-middle' category, and the main task is to integrate all these initiatives into a single mechanism.
Democratic Alliance (DA) Deputy Jane Adrians demanded that Manamela provide timelines for the government to present a concrete, funded decision for students falling between the NSFAS threshold and the cost of higher education. She reminded that the government has acknowledged the difficulties of the 'missing-middle' for years, yet thousands of capable students remain outside accessible support.
Manamela responded that the next step will be presenting the matter to the Cabinet, and the government intends to implement elements of a sustainable student financing model starting next year. He explained that the model will require time to become a financing system that meets the country's needs, but the target date is set for 2027.
Economic Freedom Fighters (EFF) representative Mampuru Mampuru questioned the steps taken for the 'complete reorganization' of what he termed a 'failed, debt-inducing loan scheme.' Manamela rejected this characterization of the system, stating that about 800,000 students receive higher education for free, and the 'missing-middle' loan opened an additional path for those who did not qualify for scholarships. He stressed that this is not a credit-focused financing model, but a free higher education model supplemented by measures to serve the needs of the 'missing-middle.' Nevertheless, Manamela acknowledged that the number of eligible applicants in the 'missing-middle' category remains too low, noting that 'this number is too small, 3,000.' He concluded that the plan for the 2027 academic year is to ensure an efficient working NSFAS loan scheme and a comprehensive student financing model.
