Parliamentary members criticised the National Student Financial Aid Scheme (NSFAS) after it revealed it paid R616-million to four intermediate service providers managing student accommodation during 2024 and 2025, before switching to direct payments in 2026. The payments covered services from companies such as Profecia IT, Xiquel Group, NDT, and TYM.
NSFAS disclosed these figures during a Portfolio Committee on Higher Education meeting on 23 September, raising fresh concerns about governance and financial oversight of student accommodation payments. According to a Daily Maverick report, over R260-million was disbursed in 2025 alone to these service providers. NSFAS confirmed that it moved to direct payments to accommodation providers starting early this year, while the Special Investigating Unit (SIU) is actively investigating student accommodation arrangements.
NSFAS acting CEO Waseem Carrim warned against abruptly terminating the agreements with the solution partners, stating: “The premature termination of these agreements, without adequate internal systems in place, would risk disrupting the accommodation and payment processes upon which student beneficiaries depend.” Parliamentary representatives strongly challenged the necessity and management of four parallel accommodation systems, with Portfolio Committee chairperson Tebogo Letsie questioning: “Why would NSFAS want to be donated four systems to do what?”
Further scrutiny emerged after a legal and forensic review found irregularities in the procurement of these third-party solution partners, advising NSFAS to build internal capacity before cutting the contracts. The NSFAS accommodation policy states that beneficiaries should not be liable for accommodation fees and that only accredited accommodation providers adhering to NSFAS processes will be paid.
Economic Freedom Fighters MP Sihle Lonzi condemned the situation: “I think people of South Africa, Parliament, even NSFAS itself can see what is taking place here is a total injustice.” This controversy adds to ongoing debates about transparency and financial governance within NSFAS, an institution crucial for enabling access to higher education among low-income students.
While multiple official sources confirm the overall payment figures and transition to direct payments, the detailed cost breakdown per service provider remains partly unverified, and the full implications of the forensic findings are still unfolding. NSFAS’s shift aims to enhance oversight and reduce unnecessary intermediaries draining resources meant for students.
The next steps include continued parliamentary oversight, the SIU’s investigation outcomes, and closer monitoring of student accommodation funding to prevent similar governance issues. Cape Flats News will provide updates on any new developments from the parliamentary committees or NSFAS.