South Africa does not offer universal free higher education. Instead, the National Student Financial Aid Scheme (NSFAS) provides comprehensive support—covering tuition, accommodation, and allowances—for students from households below a certain income threshold (historically around R350,000). This policy expanded significantly after the #FeesMustFall protests, becoming a key government commitment. NSFAS has funded hundreds of thousands of students annually (over 660,000 approved for the 2026 academic year).
The Immediate Funding Crisis
As of mid-August 2026, Higher Education Minister Buti Manamela publicly warned that the policy is under severe pressure because NSFAS faces a roughly R15 billion shortfall. This gap grew from about R2.5 billion in 2018 to R13.5 billion the previous year. The core drivers are:
- Rapidly increasing numbers of qualifying students entering universities and TVET colleges.
- Government allocations that have not kept pace within the Medium-Term Expenditure Framework.
Manamela stated that if the money cannot be found from the fiscus or elsewhere, the government “need[s] to rethink our approach towards free higher education.” He noted that while enrolments could theoretically be controlled, policy requires funding qualifying students—yet the funds are simply not available. Discussions with the Finance Minister are ongoing, and policy proposals are being developed.
Finance Minister Enoch Godongwana has separately criticised NSFAS administrative costs (around R700 million per year), arguing that money could instead fund thousands more students.
Corruption and Mismanagement as Key Accelerators
Corruption and weak governance have significantly eroded resources that should support students, compounding the funding shortfall:
- SIU investigations have uncovered large-scale irregularities. More than R5 billion in NSFAS aid was flagged as wrongly awarded to ineligible students (including cases where household income exceeded the threshold), affecting over 40,000 applications. Earlier findings pointed to possible losses above R5 billion across institutions, “ghost students,” double-dipping, and accommodation fraud. The SIU has recovered substantial sums (reports cite over R1.7 billion in one phase and earlier recoveries exceeding R1 billion).
- Intermediary models (including fintech providers for payments and accommodation accreditation) created opportunities for overcharging, irregular tenders, and exploitation. Courts have voided some contracts due to irregularities involving former leadership. Reports describe cartels redirecting funds, unpaid allowances affecting tens of thousands of students (e.g., meal allowances for ~32,000), and students facing hunger, evictions, or academic exclusion.
- NSFAS itself has suffered prolonged governance collapse: qualified/disclaimer audits, delayed reports, irregular expenditure, weak internal controls, and leadership failures. It has been placed under administration at times, with turnaround efforts ongoing amid ongoing problems (payment delays, outstanding debts to institutions running into hundreds of millions).
- Broader higher education corruption includes “university capture” by networks involved in procurement fraud, academic fraud (e.g., questionable degrees), and political patronage. Institutions such as the University of Fort Hare have faced major SIU probes (hundreds of millions in irregularities), threats against anti-corruption leaders, and governance crises. Sector Education and Training Authorities (SETAs) have also been criticised for cadre deployment, maladministration, and investigations.
Portfolio committee members and others have explicitly linked corruption to reduced access for the genuinely needy, describing NSFAS at times as treated more as a vehicle for personal enrichment than student support.
Broader Context, Nuances, and Implications
- Not solely corruption: The primary stated driver of the current R15 billion gap is the structural mismatch between expanding entitlement and constrained budgets. South Africa’s fiscal pressures (competing needs in basic education, health, infrastructure, high unemployment, and a limited tax base) make universal or fully sustainable fee-free higher education challenging. Earlier commissions (e.g., Heher) warned against fully free models as unaffordable.
- Implementation failures amplify the threat: Even available funds often fail to reach students reliably due to administrative breakdowns, intermediaries, and weak verification. This leads to protests, campus disruptions, and eroded trust.
- Political and governance dimensions: Accusations of cadre deployment, political interference, and attempts to reverse reform efforts appear in critiques of the higher education ministry and related bodies. Some universities face capture risks that divert resources and undermine academic integrity.
- Consequences for students and the system: Qualifying students face delayed or missing support, risking dropout, debt accumulation (NSFAS-related student debt forms a large share of the sector’s overall outstanding debt), and reduced access. Institutions struggle with unpaid fees. Long-term, this threatens equity goals, skills development, and social mobility for poor and working-class youth. Reforms under discussion include tighter controls, direct payments, possible eligibility adjustments, enrolment management, or alternative funding models.
In summary, free higher education for the poor and working class via NSFAS is under real and acknowledged threat in 2026. The immediate trigger is a large, growing funding shortfall driven by demand outstripping allocations, but decades of corruption, ghost beneficiaries, irregular tenders, poor controls, and governance failures have wasted billions that could have supported more students and made the system more sustainable. Without closing the fiscal gap and decisively rooting out corruption and strengthening administration, the policy faces pressure to be scaled back, redesigned, or partially abandoned. Ongoing SIU work, administrative interventions, and policy reviews will shape the outcome.
