South Africa’s Finance Minister Calls for NSFAS Overhaul, Cites Inefficiency

South Africa’s Finance Minister Enoch Godongwana has renewed his criticism of the National Student Financial Aid Scheme (NSFAS), questioning its value and proposing a more streamlined approach to student funding. His comments come amid ongoing scrutiny of the scheme’s management and delays in disbursing funds to students.

Godongwana’s Concerns

Godongwana argues that the current administrative costs of NSFAS – approximately ZAR700 million (roughly $42 million USD as of March 5, 2026) annually – are excessive. He believes these funds could be more effectively utilized by directly funding approximately 9,000 additional students. Cape Argus reports Godongwana stating, “If we took that money and divided it, we could pay the fees of 9,000 students, just with what we spend on administration.”

The Minister’s criticism extends to NSFAS’s operational inefficiencies. He points out that the scheme has outsourced functions it was originally designed to handle, employing three additional service providers instead of performing these tasks internally. University World News highlights this concern.

Executive Compensation and Past Criticism

Godongwana has also previously raised concerns about high executive pay within NSFAS, citing reports that the CEO earns approximately ZAR4 million per year. Cape Argus details these past criticisms.

Proposed Solution: Direct Funding to Universities

Last year, Godongwana suggested dissolving NSFAS and transferring the responsibility for student funding directly to universities. He believes this would reduce costs and expedite the delivery of funds to students. Cape Argus reported on this proposal.

NSFAS Acknowledges Corruption Concerns

While advocating for change, Godongwana’s criticisms are not aimed at student funding itself, but at the structure of NSFAS. NSFAS CEO Waseem Carrim has acknowledged the presence of corruption within the organization, specifically in the administration of bursaries, loans, and the accommodation sector. IOL reports Carrim’s commitment to collaborating with authorities like the Auditor-General and the Special Investigating Unit (SIU) to address these issues.

Background on NSFAS

Established in 1996, NSFAS is the primary government-backed program in South Africa providing financial aid to low-income students pursuing tertiary education. It covers tuition, housing, living allowances, and other study-related expenses. Despite its role in enabling access to higher education for many, NSFAS has faced persistent challenges related to administrative delays and outdated systems. IOL provides background information on the scheme.