Finance Minister Enoch Godongwana has sharply criticised the National Student Financial Aid Scheme (NSFAS), describing it as financially inefficient and structurally redundant. Addressing a business gathering in Cape Town, Godongwana said that if the decision rested with him, he would “shut down NSFAS immediately,” arguing that the scheme adds unnecessary administrative costs to the higher education funding system.
According to the Minister, NSFAS’s core function—transferring government funds to universities—could be executed more effectively through direct payments from the Department of Higher Education to institutions.
“You don’t need that conduit,” Godongwana said. “Universities can deliver the required tasks without the additional layer of bureaucracy.”
He also criticised NSFAS’s reliance on outsourced service providers for student allowance disbursements, calling it evidence of institutional dysfunction. NSFAS currently uses four private companies to perform work it was originally mandated to manage internally, a system that has drawn scrutiny from students and auditors alike.
Godongwana warned that numerous stakeholders have been “co-opted to protect NSFAS,” despite its operational failures and the financial risks it poses to the state.
The scheme remains under pressure due to persistent governance issues, delayed allowance payments, accommodation bottlenecks, and allegations that its failures have contributed to student drop-outs and mental-health crises.
While the Minister signalled that a structural overhaul of the student-funding model is overdue, the Higher Education Ministry has reiterated its commitment to stabilising NSFAS rather than dissolving it. Government is expected to maintain strict oversight while exploring long-term funding reforms for the sector.
