The Deputy Minister of Higher Education has formally proposed replacing the National Student Financial Aid Scheme (NSFAS) with a direct funding model administered by the National Treasury. The move seeks to overhaul how student financial support is managed following years of systemic administrative failures and corruption allegations that have hampered higher education access.
Addressing Systemic Failures And Oversight
During a parliamentary briefing on 12 June 2026, officials confirmed that the current institutional framework governing NSFAS is no longer fit for purpose. High administrative costs and consistent delays in the disbursement of student allowances have led to the conclusion that a more direct mechanism is required to ensure accountability.
“The current institutional framework is no longer fit for purpose. Moving to a direct funding mechanism administered through the Treasury could ensure greater oversight, accountability, and timely disbursement of funds to students,” said the Deputy Minister of Higher Education.
The National Treasury has long expressed concerns regarding the mismanagement of funds within the existing agency. Higher Education Minister Dr. Nobuhle Nkabane confirmed that the government is exploring all available options to secure a more efficient system that protects students from past administrative pitfalls.
Path Toward A New Funding Mechanism
This proposal follows a turbulent period for the scheme, which between 2024 and 2025 faced widespread student protests and technical crises that necessitated the appointment of an external administrator. By centralising funding through the National Treasury, the government aims to recover public trust and streamline the flow of financial aid to institutions and students directly.
While the proposed shift signals a intent to bypass the bottlenecks often associated with NSFAS, the specific implementation timeline and the exact technical mechanism for managing individual student accounts remain under development. Government departments are expected to provide further clarity on the transition process in the coming months as they continue to weigh the restructuring of national financial aid.