An unsustainable student funding model puts higher education at risk

The National Student Financial Aid Scheme (NSFAS) was established to widen access to higher education for young people from poor and working-class households. That commitment remains essential. But a funding system that cannot reliably meet its obligations places students at risk, transfers mounting financial pressure to universities and threatens the resources on which quality education depends.

South African universities are expected to widen access, produce research that addresses society's most pressing challenges, and prepare graduates for an economy reshaped by artificial intelligence, climate change and technological disruption. They must do so while managing finite resources and growing demands.

A national promise under pressure

NSFAS represents one of the most important commitments to equitable access to higher education in democratic South Africa. Stellenbosch University (SU) fully supports this purpose. We agree that financial circumstances should not prevent talented and deserving students from pursuing a university education.

The scale of demand is clear. At SU, NSFAS-funded enrolment grew by more than 300% between 2017 and 2025, with these students now accounting for about one in seven of those we teach. This represents an important expansion of opportunity, but funding arrangements must keep pace.

The current NSFAS model is not financially sustainable. The shortfall at SU alone runs into hundreds of millions of rand. Despite years of engagement through parliamentary submissions, ministerial visits and direct correspondence, the gap remains.

When funding fails, students and education pay the price

Uncertainty about funding can jeopardise registration, disrupt accommodation arrangements and leave students struggling to meet basic living costs while trying to study.

Universities have a responsibility to respond. At SU, we have introduced measures to help students navigate financial difficulties and remain enrolled and on track to complete their degrees. Their academic success should not be hindered by systemic funding failures.

In 2025, the University paid interim allowances to NSFAS students well beyond the funding it had received at the time. We also committed R30 million of our own resources to top-up bursaries for meals and accommodation. Affordable meal plans, emergency accommodation, and a student debt work group form part of our broader support efforts.

We do this willingly. It is part of who we want to be. But there is a limit to what universities can absorb. Every rand used to bridge a funding gap is a rand not invested in laboratories, researchers, lecturers, or infrastructure.

Universities rely on government subsidies, student fees, research income, and philanthropy to sustain their academic missions. When a substantial funding shortfall must be covered from institutional funds, other priorities inevitably come under pressure.

This is the difficult reality at the heart of the debate: an underfunded student aid system places both access and quality at risk. Access and excellence are not opposing objectives. They reinforce each other when students receive the support they need and universities have the resources to provide a high-quality education.

Beyond NSFAS: the missing middle

The challenge extends beyond students who qualify for NSFAS. Many families earn too much to qualify for state bursary support but too little to meet the full cost of university education without considerable financial strain. Emergency bursaries and special loans provide some relief, but they cannot meet the full scale of the need.

Institutional fundraising and private contributions cannot substitute for a dependable public funding system. Nor can universities be expected to bridge funding gaps indefinitely without consequences for their wider academic responsibilities.

Government has a central responsibility to support access, particularly for students from poor and working-class households. Universities must continue to manage their resources responsibly, pursue efficiencies and develop additional income through research, partnerships, and philanthropy. Graduates, employers, and private partners may also have a role in a funding arrangement that distributes costs fairly and recognises the public and private benefits of higher education.

The issue is not whether universities should contribute to the solution. We already do. It is whether the system is designed to deliver what it promises.

From short-term fixes to structural reform

Students need to know before the academic year begins whether they qualify for funding and what support they will receive. Universities need timely payments and clear rules on which they can plan. Government needs a model that is financially viable over the long term.

One approach is a differentiated hybrid model combining grants for the poorest students with income-contingent support for others. The details of such a model require rigorous scrutiny, including its affordability, repayment arrangements, administration, and implications for students from different backgrounds.

The principle, however, deserves serious consideration: a viable system must match the form and level of support to students' circumstances while ensuring that the overall commitment is financially viable.

The Minister has acknowledged the need for fundamental reform and called for a settlement that links student support to institutional capacity and clarifies each partner's responsibilities. This recognition must now translate into action with a financially credible agreement that sets out clear implementation milestones and insists on accountable leadership.

The Department's planned Comprehensive Student Funding Model roadmap offers an opportunity to establish a joint, time-bound process involving the Minister, National Treasury, universities, students, NSFAS, the South African Revenue Service, employers, and financial institutions.

Consultation is necessary, but consultation without decisions will simply prolong the uncertainty students and universities already face.

South Africa needs an affordable, transparent, and implementable settlement, supported by financial projections, clear responsibilities, and firm deadlines.

SU will continue to engage constructively and contribute its expertise to this process. We will also continue to support eligible students to the best of our ability.

Actions, not promises

South Africa has chosen to widen access to higher education. The next imperative is to make that access dependable.

We should not accept the proposition that greater access must come at the expense of academic quality or institutional sustainability. A properly designed and adequately funded system can deliver all three.

The cost of inaction will not be measured only in university balance sheets. It will be measured in interrupted studies, lost opportunities, weakened institutions and, ultimately, South Africa's diminished ability to develop the talent and knowledge on which its future depends.

Students deserve more than the promise of access. They deserve a funding system that enables them to complete their studies, realise their potential and contribute to society.

Widening access is a national commitment. Making that access sustainable is a national responsibility. The time to act is now. DM

Author: Prof Deresh Ramjugernath, Rector and Vice-Chancellor of Stellenbosch University