Joburg NSFAS accommodation providers warn unpaid millions pushing them to the brink

The National Student Financial Aid Scheme (NSFAS) has been placed under administration as governance failures and financial breakdowns deepen a payment crisis that has already left accommodation providers carrying millions in unpaid costs.

The fallout could place thousands of students at risk of eviction, as unpaid service providers warn they cannot continue to house them indefinitely and could be forced to ask them to leave.

Higher Education Minister Buti Manamela announced on Monday that the NSFAS board had been dissolved and an administrator appointed, citing systemic failures after repeated attempts to stabilise the entity fell short.

The move comes just days after NSFAS insisted in replies to questions from Daily Maverick that its accommodation payment system was functioning and that outstanding claims were being addressed.

In written responses last month, NSFAS said it had implemented an intervention to verify and resolve unpaid accommodation claims, involving its student accommodation unit, core business operations and ICT teams.

The scheme said the process had “introduced some stability within the accommodation sector” and that providers had received payments after resolving outstanding issues.

It further stated that “all the invoices have been received and have been verified”, with mop-up payments already processed for 2024 and 2025 claims.

NSFAS also attributed ongoing delays to administrative and institutional factors, including late student confirmations by universities, incorrect classification of accommodation allowances, and students being placed in unaccredited housing.

The scheme said that at least 95% of accommodation providers had now had their banking details successfully verified and were included in its direct payment system for 2026.

Delays and delays

However, accommodation providers across Gauteng say those assurances bear little resemblance to their experience.

Duan Coetzee, director of Urban Ocean Property Developers, said the administration announcement had deepened uncertainty for providers already under severe financial strain.

“I was shocked to hear this news today. We do not know what this means for us yet. What do we do – put 400 kids out on the streets?” he said.

“We now know we will not be paid, at least any time soon. This is extremely serious.”

Coetzee says he is owed about R4.5-million dating back to 2024 for three buildings in the Johannesburg CBD housing up to 400 NSFAS-funded students.

He said providers had spent nearly two years trying to resolve payment delays, repeatedly being told that issues related to student verification or banking details were to blame.

“All students have been verified and our bank accounts are obviously in order. We’ve had numerous meetings, numerous confirmations – and still no payments,” he said.

“They keep pushing out new payment dates for ‘mop-up’ payments. We reach out daily. Nothing changes.”

Coetzee rejected NSFAS’s explanation that banking or verification issues were the primary cause of delays.

“Although they now say there are ‘bank issues’ with payments to buildings held in trusts, this is rubbish,” he said. “We have bank confirmation letters. The account is more than 20 years old with Absa, and NSFAS has paid into it before.”

Frustrated by the delays, he had already instructed his lawyers to begin legal action, warning that continued nonpayment could ultimately place students at risk. Now he says the providers are uncertain what is going to happen.

Financial strain

Across Gauteng, smaller providers report similar struggles.

In Soweto, Kgotso Nkobe converted a family home into student accommodation, initially housing 12 students. That number has now dropped to just four as unpaid costs mount.

He estimates NSFAS owes him about R60,000.

“We still have to pay electricity, water, security, cleaning – everything,” Nkobe said. “But there is no income coming in.”

Another provider, Masombuka Student Residence, reported that more than R100,000 was allegedly outstanding by December 2024. In that case, the owner said they were told by a university finance office that funds had been returned to NSFAS – deepening confusion over where payments are stalling.

NSFAS has said providers who accommodate students without confirmed funding or signed lease agreements “do so at their own risk”, and that payments depend on institutions submitting accurate data and students being properly registered on its accommodation system.

But providers interviewed for this article said they had repeatedly complied with those requirements, undergone verification processes and attended multiple engagements – without payments materialising.

“We sit in meetings, we get told everything is sorted – and then nothing happens,” said one provider, who asked not to be named.

The financial strain is increasingly unsustainable.

Accommodation providers operate on tight margins, with upfront costs including utilities, security, maintenance and staffing. Without timely NSFAS disbursements, many are effectively subsidising the state.

Several providers warned that if payments were not made soon, they might be forced to withdraw accommodation – potentially displacing students mid-year.

The administration decision now raises urgent questions about whether these claims – many of which date back to 2024 – will be settled, or further delayed by yet another institutional reset.

Broader breakdown

It also follows fresh warnings of a deeper governance breakdown at NSFAS.

The Organisation Undoing Tax Abuse (Outa) said last week that at least seven board members had resigned since July 2025, raising concerns about whether the scheme had been lawfully constituted for months.

Outa also flagged that some resigned members may have continued appearing on official NSFAS documentation as recently as April — potentially creating a misleading impression of governance stability.

The organisation warned that the loss of financially skilled board members, combined with delays in key decisions and ongoing transparency concerns, pointed to a broader institutional crisis at an entity responsible for more than R50-billion in public funds.

For providers on the ground, that crisis is already playing out. DM