Questions mount over Nsfas still paying accommodation middlemen
· Citizen
Fresh questions have been raised over the National Student Financial Aid Scheme’s (Nsfas) accommodation payment system after EFF Member of Parliament claimed intermediary companies continue to process billions of rand in student accommodation payments despite assurances that the function had been brought in-house.
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The concerns come as thousands of students continue to grapple with funding delays and accommodation challenges, with the continued use of private “solution partners” now under renewed political scrutiny.
EFF MP demands answers
EFF MP and Portfolio Committee on Higher Education member Sihle Lonzi has written to Higher Education Minister Buti Manamela requesting detailed information about four companies allegedly still performing accommodation-related functions on behalf of Nsfas.
The letter follows an oversight visit to Nsfas offices, where Lonzi said officials indicated that the four middleman accommodation “solution partner” companies remain involved in the payment process.
“This is deeply concerning because Nsfas and the department publicly announced that it had brought the accommodation payment function in-house from the start of 2026, creating the clear impression that the middleman scheme had come to an end,” Lonzi wrote.
He questioned why public funds were allegedly still being channelled through intermediaries despite previous commitments to end the arrangement.
Billions processed through accommodation system
Lonzi said the financial implications were significant, citing figures previously published by Nsfas.
According to the letter, Nsfas confirmed that approximately R2.9 billion in accommodation payments were processed through the middleman system during 2024, resulting in about R145 million in intermediary fees.
He further noted that Nsfas had confirmed paying more than R1.1 billion to accommodation providers during a single payment cycle in 2026.
“Based on these figures, published by Nsfas, the accommodation programme administers several billion rand each year. If intermediary fees continue to be levied at this rate, the annual cost of this middleman scheme to the public purse exceeds R220 million,” Lonzi said.
“It is our duty as Members of Parliament to ask why scarce student funding continues to be diverted to middlemen schemes.”
Lonzi requested the names of the four companies, details of their contracts, whether they hold valid Financial Services Provider licences, the legal framework allowing them to process financial transactions, the functions they currently perform, and how much they have been paid since being appointed.
“At a time when students continue to struggle to access accommodation and funding, every rand spent on unnecessary middleman schemes is a rand that could have been invested directly in supporting poor and working-class students of South Africa,” he said.
“Parliament is entitled to know precisely how much public money has been wasted on this scheme, and whether its continued existence can be justified.”
Ministry defends Nsfas administration
The Ministry of Higher Education and Training responded by urging public debate around Nsfas expenditure be based on “verified facts and the applicable legal framework”.
It also stressed that commentary surrounding Nsfas administration should be viewed within the broader context of the institution’s governance history.
“Nsfas, over a number of years, operated under different governance arrangements, each carrying costs associated with the governance and management of a complex public institution responsible for administering more than R50 billion annually in student financial assistance.”
It defended the current administration’s technical support model, saying it consists of four specialist advisers with a combined annual remuneration of about R9.9 million.
The ministry said this compares with approximately R16.5 million spent on technical support under a previous administration, R19.6 million under an earlier administration and around R31 million associated with the former Nsfas board and committee structures during the 2025/26 period.
“These governance arrangements are not identical and should not be treated as direct like-for-like comparisons. Boards, administrations, and statutory governance structures perform different functions,” the ministry said.
It added that the current administration had “consciously adopted a smaller and less costly technical support structure”, while providing the administrator with specialist expertise to restore governance and improve operations.
Focus remains on rebuilding Nsfas
The ministry said the advisers were appointed to help restore governance, strengthen financial controls, modernise Nsfas systems, improve applications and appeals processes, rebuild public confidence and develop a sustainable student funding model.
“The public should judge the administration by whether it delivers measurable improvements in governance, accountability and service to students, not simply by the existence of technical advisers,” the ministry said.
It added that Nsfas “exists to serve poor and working-class students” and that the administration remained committed to restoring stability and strengthening accountability at the institution.