South Africa’s student funding crisis is putting increasing pressure on universities, with the National Student Financial Aid Scheme (NSFAS) reportedly owing public universities R10.49 billion in unpaid tuition funding.
The massive outstanding bill comes as NSFAS grapples with a budget deficit of more than R15 billion, raising concerns about the financial sustainability of universities and the growing debt burden facing students.
Universities left waiting for billions
Suspended NSFAS administrator Professor Hlangeni Mathebula told a parliamentary committee that the scheme did not have sufficient funds to settle its outstanding university obligations.
Among the institutions affected, NSFAS reportedly owes Unisa R405 million, while its outstanding debt to Stellenbosch University is approaching R700 million.
Department of Higher Education and Training Deputy Director-General for University Education Thandi Lewin described the situation as urgent. The department and NSFAS could potentially approach National Treasury to request that part of a future funding allocation be released earlier.
The growing arrears are creating a serious cash-flow challenge for universities that rely on NSFAS payments to cover tuition costs for funded students.
NSFAS points to rising accommodation costs
NSFAS Chief Financial Officer Wasim Carrim attributed much of the scheme’s financial pressure to the rising cost of student accommodation.
Carrim said NSFAS now provides accommodation support for almost 95% of university students, with spending on housing exceeding expenditure on tuition fees.
He argued that the growing accommodation bill is pushing NSFAS further away from its central mandate of supporting financially disadvantaged students who also meet the required academic criteria.
The accommodation funding model has also created additional financial pressure at some universities where the allowance does not cover the actual cost of housing.
Universities feel the impact
The University of Pretoria said NSFAS owed it R331 million for the seven months ending in July 2026.
University spokesperson Rikus Delport said the outstanding payments were affecting the institution’s cash flow and forcing it to defer or reprioritise expenditure.
The university said its NSFAS debt related to unpaid tuition and was not caused by the R52,000 accommodation cap.
The University of the Witwatersrand has also confirmed that a significant portion of NSFAS tuition funding for the 2026 academic year remains outstanding.
At the University of Cape Town, the consequences are being felt directly by students.
As of August 2026, 3,269 NSFAS-funded students had accumulated debt linked to the gap between the scheme’s accommodation allowance and the actual cost of housing.
UCT estimates that the resulting shortfall could reach R150 million during 2026.
Students caught in the middle
While universities are struggling to recover money owed by NSFAS, students risk becoming the unintended casualties of the funding crisis.
UCT has allowed NSFAS-funded students who meet the required academic progress standards to register despite outstanding debt.
That approach allows affected students to continue their studies, but it also transfers more financial pressure onto the university and increases the amount of student debt on its books.
The situation highlights a difficult balancing act: universities need to keep students in the classroom while also protecting their own financial sustainability.
A growing funding problem
The NSFAS crisis is therefore no longer simply about whether students receive financial aid.
With billions of rand owed to universities, the issue is increasingly affecting institutional cash flow, accommodation funding, student debt and the ability of universities to plan their budgets.
The key question now is whether NSFAS, the Department of Higher Education and Training and National Treasury can find a solution before the funding shortfall creates even greater disruption across South Africa’s higher education system.
