Parliament’s Portfolio Committee on Higher Education and Training criticised the National Student Financial Aid Scheme (NSFAS) after learning it paid R616 million to four middleman companies managing student accommodation payments in 2024 and 2025. The four companies involved were Xiquel Group, New Dawn Technologies (NDT), Training Young Minds (TYM), and Profecia IT.
The payments were made before NSFAS shifted to a direct payment system in 2026, aiming to bypass these intermediaries. The committee expressed serious concern about the transparency and legitimacy of these arrangements during a hearing on 23 September 2026.
Tebogo Letsie, chairperson of the Portfolio Committee, questioned the necessity of outsourcing key housing payment functions. “Why would NSFAS want to be donated four systems to do what? I have a feeling that we’re not being told the truth,” Letsie said at the parliamentary session.
NSFAS acting CEO Waseem Carrim acknowledged the risks involved with terminating the service agreements prematurely. “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,” Carrim said. He confirmed the transition to direct payments began early 2026 following a legal and forensic review.
The review uncovered irregularities in the procurement of these solution partners. According to a Department of Higher Education and Training response presented in Parliament, “The review’s central finding was that irregularities had occurred in the procurement process that led to the appointment of the Solution Partners.”
Concerns about private accommodation providers have mounted since 2025, when Parliament’s committee called for a forensic investigation into cases of misrepresented services and inflated bed counts. The Special Investigating Unit (SIU) is currently probing student accommodation contracts under presidential proclamation, with NSFAS cooperating fully.
This controversy comes amid broader scrutiny of NSFAS’s accommodation model, which funds student housing for low-income students. Improper management and inflated payments risk undermining access to affordable accommodation for thousands of students across South Africa.
The exact breakdown of funds paid to each solution provider and the full scope of any wrongdoing remain under investigation. Claims of “ghost students” created by inflated bed numbers have yet to be fully verified by the ongoing forensic processes.
NSFAS reported in August 2025 that an ENS-led review on student accommodation partnerships was underway and was expected to conclude by September that year, prompting the agency to overhaul its repayment model. By March 2026, direct payments to accommodation providers commenced.
The next key developments will depend on findings from the SIU’s investigation and any subsequent action taken against those responsible. The Cape Flats News journalist will follow updates as Parliament and NSFAS release further details.