The recent Auditor-General's (AG) report on the National Student Financial Aid Scheme (NSFAS) has ignited widespread concern within South Africa's higher education sector, revealing that bursaries continued to be disbursed to 822 students officially recorded as deceased by the Department of Home Affairs. This shocking discovery, part of a broader audit for the 2024/25 financial year, underscores systemic vulnerabilities in the administration of student funding meant to support underprivileged youth pursuing tertiary education at universities and Technical and Vocational Education and Training (TVET) colleges.

NSFAS, established under the National Student Financial Aid Scheme Act of 1999, plays a pivotal role in South Africa's post-school education landscape. It provides comprehensive bursaries covering tuition, accommodation, living allowances, and learning materials to eligible students from households earning less than R350,000 annually. In 2026, NSFAS approved funding for over 600,000 students, with a budget exceeding R54 billion, highlighting its scale amid rising enrolment at the country's 26 public universities and 50 TVET colleges.

🔍 Unpacking the Auditor-General's Damning Findings

The AG's audit delivered a 'disclaimer of opinion'—the most severe rating—citing a collapse in internal controls, governance, and accountability at NSFAS. Data analytics exposed multiple red flags: beyond the 822 deceased beneficiaries, over 14,000 students from households surpassing the income threshold received aid; 321 engaged in double-dipping by claiming both NSFAS bursaries and the Social Relief of Distress (SRD) grant; and tens of thousands with prior qualifications or failing academic progression rules stayed funded.

These lapses likely stem from outdated ICT systems, poor integration with Home Affairs' database for death notifications, and inadequate verification protocols. For instance, NSFAS relies on the Higher Education Management Information System (HEMIS) and self-reported data, which proved unreliable without real-time cross-checks. The absence of quantified financial losses for the deceased cases amplifies calls for forensic scrutiny, as each bursary averages R100,000-R150,000 annually per student, potentially siphoning millions from deserving applicants.

Government Response: Ministerial Directives and SIU Collaboration

Higher Education and Training Minister Buti Manamela swiftly intervened, convening a joint accountability meeting with NSFAS's board, acting CEO, and the AG. He issued a formal directive mandating the activation of NSFAS's forensic unit to probe fraud cases alongside the Special Investigating Unit (SIU). Key actions include auditing all accredited private accommodation providers—plagued by unsafe conditions near taverns and harassment—and resolving a 7,805-appeal backlog within 70 days.

By April 30, 2026, NSFAS must submit a comprehensive remedial plan covering data analytics fixes, HEMIS integration, SARS income verification resumption, and consequence management. Quarterly oversight sessions will ensure transparency, with reports to Parliament's Portfolio Committee. Manamela emphasized, “We are committed to NSFAS. We are committed to the students. And we are committed to building an institution that can be trusted.” For full details, see the ministerial statement.

Student Unions Ignite Outrage and Demand Accountability

The South African Union of Students (SAUS) labeled the revelations a “serious institutional failure eroding public trust,” demanding urgent reforms, leadership overhaul, and criminal probes. Similarly, the African National Congress Youth League (ANCYL) called for an immediate SIU investigation into the 822 ghost beneficiaries, arguing it perpetuates inequality in higher education access.

• Immediate suspension of implicated officials.
• Full recovery of misallocated funds.
• Systematic overhaul of eligibility verification.
• Transparent reporting on appeals and payouts.

Social media, particularly X (formerly Twitter), buzzed with trending posts decrying “ghost students” while living applicants languish, amplifying pressure on NSFAS amid ongoing protests at institutions like Durban University of Technology (DUT).

Photo by Jolame Chirwa on Unsplash

Broader Irregularities: A Pattern of Mismanagement

The deceased payments are symptomatic of deeper woes. Accommodation scandals involve landlords breaching contracts—proximity to alcohol outlets, unreliable transport, and debt collection abuses—exacerbating campus disruptions. Coupled with delayed 2026 disbursements, these have fueled violent clashes at TVETs and universities, diverting focus from academics.

NSFAS's shift to direct payments for allowances aimed to curb abuse but exposed new flaws, like unverified bank details persisting post-death.

Impacts on South African Universities and TVET Colleges

Public universities like the University of Johannesburg (UJ) and University of Cape Town (UCT), alongside TVETs, bear the brunt. Funds diverted to ineligible or ghost students mean fewer spots for qualifying first-years, straining infrastructure amid 1 million+ funded learners. Enrolment surges—20% at some TVETs—clash with housing shortages, worsening dropout rates hovering at 30-40%.

Administrators report administrative burdens verifying NSFAS statuses, delaying registrations. For students, uncertainty breeds mental health issues, with SAUS noting increased suicides linked to funding delays.

Historical Context: NSFAS Scandals and SIU Recoveries

This isn't isolated. Prior SIU probes recovered R1.7 billion from 40,000 ineligible beneficiaries, including R112 million from 421 at select unis/TVETs. Issues like the R5 billion improperly assigned in 2023 highlight chronic fraud vulnerabilities. The SIU's role—investigating corruption under Proclamation R118—now expands to these AG-flagged cases.

Read the SIU's latest on recoveries via their official update.

Pathways to Reform: Technological and Policy Fixes

Stakeholders advocate AI-driven verification, blockchain for payments, and mandatory biometric ID links. Minister Manamela prioritizes ICT modernization and data-sharing pacts. Universities like Stellenbosch push for hybrid funding models blending NSFAS with private bursaries.

Photo by Bradley Terblanche on Unsplash

• Real-time Home Affairs/SARS integration.
• Forensic audits of all beneficiaries.
• Stricter academic progression enforcement.
• Decentralized accommodation vetting by institutions.

Future Outlook for NSFAS and Higher Education Equity

With Budget 2026 allocating R55.4 billion, NSFAS must rebuild trust to sustain 2 million bursary/loan recipients by 2030. Success hinges on SIU probes yielding prosecutions, system upgrades preventing recurrence, and inclusive policies aiding working-class access to degrees in scarce skills like engineering at Wits or nursing at Cape Peninsula University of Technology.

Optimism lies in resolved backlogs and CEO recruitment, but sustained parliamentary oversight is crucial. For balanced analysis, see News24's coverage here.

Stakeholder Perspectives: Voices from the Ground

VCs at UCT and UKZN decry eroded confidence, urging NSFAS devolution to institutions. Students at DUT protests highlight lived hardships: “While ghosts get paid, we starve.” Minister assures no cuts for qualifiers, focusing recovery on fraudsters.