PRETORIA, Gauteng — The NSFAS crisis has reached a critical tipping point, marked by a staggering R15-billion funding shortfall and mounting concerns over financial mismanagement and governance. Adding to the institutional turmoil, the Gauteng High Court has officially suspended the appointment of NSFAS Administrator Professor Hlengani Mathebula, mandating the immediate reinstatement of the scheme’s board pending a final judicial review.
As the NSFAS crisis unfolds mid-academic year with student funding on the line, parliamentary oversight bodies are heavily questioning the legality and sustainability of the government’s interventions. Tebogo Letsie, Chairperson of the Portfolio Committee on Higher Education and Training, confirmed that the Minister of Higher Education failed to properly consult the committee, the NSFAS board, or heed adverse findings from the Nugent Commission of Inquiry before placing the entity under administration on May 4.
Flawed Legal Justifications and Ministerial Overreach
During a May 29 meeting, the Portfolio Committee challenged the minister’s rationale for dissolving the board. The minister justified the administration by claiming the board lacked a quorum. However, Letsie clarified that the NSFAS Act requires 18 members, but a quorum is met by a majority of sitting members. With seven members present—meeting the 50 percent plus one rule—including the required three executive (EXCO) members, the board was legally quorate.
Furthermore, the minister cited adverse Auditor-General (AG) findings as grounds for administration. The committee successfully argued that these negative audit opinions were generated under a *previous* administrator, making it unjust to punish the current board for historical failures.
The High Court validated the committee’s stance, with the presiding judge describing aspects of Mathebula’s conduct as “bizarre” and referencing his controversial history. The court noted that the minister was incorrectly briefed by advisors claiming Mathebula faced no charges following the Nugent Commission—a claim the court found to be untrue. Reports indicate that the minister’s initial legal team flagged severe errors in the case and was subsequently replaced before the administrator was appointed.
While committee members have requested that the minister be summoned to Parliament to explain the flawed vetting and decision-making processes, they are awaiting the ministry’s formal decision on whether to accept or challenge the High Court’s ruling before proceeding.
A R15-Billion Shortfall and Unsustainable Debt
Beyond the governance failures, the financial metrics paint a grim picture. The funding shortfall has ballooned from R2.5 billion in 2018 to R15 billion today. Letsie warned that the current fee-free higher education model is simply not sustainable and cautioned that if NSFAS collapses, the entire higher education system will follow.
The financial strain is already impacting institutions directly. NSFAS has reportedly failed to pay university tuition fees for the past four months. The Portfolio Committee has demanded a detailed, institution-by-institution breakdown of these unpaid fees, which is expected to be delivered imminently.
The fallout has severely impacted students. Student debt tied exclusively to NSFAS-funded students currently stands at R29 billion, resulting in universities withholding certificates from over 165,000 graduates. When factoring in self-funded students, the total student debt owed to universities reaches roughly R58 billion.
The “Insanity” of Withholding Certificates
Institutions are currently sitting on R12 billion in irrecoverable debt, some of which dates back to 2017. Letsie argued that the university strategy of withholding certificates to force payment is fundamentally flawed.
“Universities themselves keeping those certificates means that those graduates will not find employment. If they can’t find employment, they will not be able to pay,” Letsie explained, noting that job advertisements strictly require certified qualifications. He warned that continuing this strategy will only cause the irrecoverable debt to balloon to R100 billion in the coming years.
To combat this, the Portfolio Committee is drafting a Private Member’s Bill to legally resolve the withholding of certificates. Letsie proposed a collaborative intervention involving the Department of Higher Education, National Treasury, the South African Revenue Service (SARS), and universities to clear the backlog and release the withheld qualifications.
Additionally, the exorbitant cost of student accommodation is exacerbating the crisis. While NSFAS caps accommodation funding at R5,200 per month, universities are charging between R9,000 and R10,000 per bed. This structural gap will be a primary focus at an upcoming parliamentary colloquium scheduled for August 28.
Looking ahead, the President has directed the Higher Education Minister to present a comprehensive, sustainable funding model to the Cabinet. Parliament expects the minister to present this new framework as a matter of urgency to ensure that from the next academic year onward, the higher education sector is shielded from chronic funding shortfalls and administrative collapse.
