Forty thousand students should never have been funded. Instead, NSFAS pushed more than R5 billion towards accounts that should have been stopped. This is not a small administrative wobble. It is a failure of the first thing a student-aid scheme must get right: figuring out who qualifies before the money moves.
The gaps sound ordinary once you line them up, which is unsettling. High household incomes got through. Applications without parents’ details still made it into the system. Dead students were still being paid. If a fund designed to catch the most vulnerable can miss all three, the problem is not one bad spreadsheet. It is the structure around the spreadsheet.
How the money slipped through
The Auditor-General’s regulatory audit of NSFAS’s 2024/25 allocations found that about 40,000 students did not meet the funding rules. The Special Investigating Unit says the same mess, built out of system failures and administrative failures, led to about R5 billion being paid out irregularly.
The most basic eligibility line was supposed to be the household-income threshold of R350,000 a year. In practice, that line was soft enough for students above it to still receive money. NSFAS also let applications through even when students left out their parents’ details, which should have triggered a stop sign long before any payment was approved.
The deceased-student issue keeps coming back. Without direct links to Home Affairs and SARS, NSFAS tries to verify life, death, and income with a toolset stuck in the wrong decade. A live connection to Home Affairs would allow deaths to be flagged quickly and funding to be closed. SARS would tighten the income checks that already appear to have holes wide enough to drive a bus through.
Siyabonga Nkambako, who leads the South African Union of Students, told PowerFM the scheme’s problems have been around for years and still produce new loopholes. His argument is blunt: NSFAS has built a funding system with too many weak points, and the people meant to be excluded keep slipping in.
He also pushed back against the idea that every bad payment should be clawed back in the same way. For households earning R500,000 and above, he says the money should be recovered. But for families sitting between R350,000 and R400,000, he argued that NSFAS should raise the current cap instead of treating all of those students as if they were equally out of bounds.
Why the student union is pushing back
Nkambako’s position is not a defence of sloppy funding. It is a warning that the current income line may be doing two jobs badly at once. It fails to block people who clearly do not belong in the system, and it may be catching households that are still under pressure and not obviously swimming in cash.
That tension matters because the scheme is already under suspicion. When student leaders talk about loopholes, they are not speaking in theory. They are talking about a machine that has repeatedly shown it cannot police its own rules, then asks the public to trust its judgement on who deserves support.
The request to connect NSFAS with Home Affairs and SARS has been floating for years because the need is obvious. If a student dies, the payment should stop. If a parent’s income is being used to test eligibility, the institution doing the test should not have to guess from a half-filled form. It should be checking live records, not hoping the paperwork was honest.
Kuhumelela made a version of that point back in 2019, when its internal audit said the scheme should link to Home Affairs records not only to confirm parents, but also to verify the person receiving the bursary. That warning was not abstract either. The firm had already found payments going to dead students.
The old scandal was the warning
NSFAS did not arrive here by accident. It was placed under administration in 2018, after which it faced accusations of irregular appointments. A forensic investigation found abnormalities that were handed to the police crime intelligence unit, and Kuhumelela said oversight of payments was limited.
The numbers from that review were ugly. The firm said NSFAS had 436 employees by the end of 2019, yet the controls still were not being enforced properly. It also said consultants were being paid without signed contracts to govern the work. This is not a tiny bookkeeping issue. It is the sort of governance mess that turns a public institution into a liability.
Then came the dead-student finding. Kuhumelela flagged a 2019 bursary paid to a student who had died two years earlier, in 2017. Its audit showed that the student had logged into the myNSFAS platform nine times. That finding led the firm to say the system was open to fraud and should be tied to Home Affairs records to check both family information and the status of the student.
The pattern became even harder to ignore in December 2021, when NSFAS overpaid students by more than R503 million. One Walter Sisulu University student received R14 million by mistake and later spent R820,000 of it within 73 days. The money had been transferred by Intellimali, the Cape Town-based company contracted by the university to handle student funds. The student was only meant to receive a monthly meal allowance of R14,000, but a technical fault in Intellimali’s sBux system triggered the overpayment. That system was later scrapped.
The record is miserable. A scheme under administration still could not hold its payments together. A later overpayment scandal still did not force a clean fix. Now the bill is apparently R5 billion, with tens of thousands of students flagged as ineligible, dead beneficiaries still showing up in the data, and the same old calls for proper verification echoing through the system again. This is not a one-off mistake. It is a public service failing in exactly the same places, over and over, until the damage becomes impossible to call incidental.
