By Akani Nkuna
The National Student Financial Aid Scheme (NSFAS) says it has welcomed a report by the Organisation Undoing Tax Abuse (OUTA) on student accommodation and will review its findings to improve how the system is managed.
“NSFAS is resolute in ensuring that any student, accommodation provider, service provider, or staff member found to have defrauded NSFAS, and by extension the state, is held accountable, with appropriate consequence management measures implemented,” NSFAS said in a statement.
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OUTA released the report last week after a two-year investigation into corruption risks, governance failures and student accommodation quality within the NSFAS system.
It said the probe examined how structural changes to the student-centred accommodation model altered how billions of rand in public funds move through the student housing pipeline.
According to OUTA, its investigation found weaknesses in accreditation inspections, procurement processes and funding arrangements involving portal service providers and accreditation agents.
It said structural changes introduced multiple intermediaries into the funding pipeline, while some accreditation agents approved properties that did not comply with the Department of Higher Education and Training’s minimum norms and standards.
OUTA also said one property listed as accommodating about 200 beds appeared to be an ordinary three or four-bedroom house.
The report also raised concerns about the appointment of online portal providers.
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OUTA said the NSFAS board appointed four student accommodation portal providers even though the evaluation committee had recommended two, and that one company had previously been disqualified before being reinstated for further consideration.
OUTA said that from 2023 to 2025, NSFAS paid accommodation for about 60% of its beneficiaries and, on average, paid for about 100,000 more beds than the number of accredited beds available. It further said a conclusion could be drawn that NSFAS paid for 367,582 students to stay in accommodation not accredited by NSFAS accreditation agents.
It also said NSFAS paid R4.523 billion over eight months in 2025 to accommodation providers in the student accommodation pilot project, at an average of R39,777 per beneficiary per month for university students and R26,614 for TVET students.
“Several properties that were inspected and accredited by accreditation agents were falsely certified. It appears that the number of beds were inflated and some properties did not adhere to municipal bylaws or the minimum norms and standards as set out by DHET,” the report said.
OUTA recommended an independent investigation into three main areas: the student accommodation portal, accommodation accreditation and off-take agreements.
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It also called for the termination of contracts between NSFAS, solution providers and accreditation agents, as well as criminal complaints against NSFAS officials and service providers found guilty of misconduct and corruption, and criminal investigations into landlords implicated in wrongdoing.
It further said the auditor general, SARS and Parliament should use the report to intensify oversight.
NSFAS said the report followed sustained engagement between the scheme and OUTA, including information provided through a Promotion of Access to Information Act request.
It said the current board had already identified major problems in the student accommodation function, cleared payment backlogs, introduced stricter controls and sought to prevent mass student evictions by the end of 2025.
NSFAS said it had since commissioned a legal and forensic review of the accommodation function and, at the start of 2026, began implementing a transition to direct payment of accommodation providers, moving away from reliance on solution partners.
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It also said the Special Investigating Unit was already probing student accommodation and that a national audit of student accommodation accreditation would take place throughout 2026.
“For the 2026 academic year, NSFAS has introduced additional controls and measures to ensure robust processes for the registration, onboarding, and placement of students in accredited accommodation, as well as accurate and timely disbursements to accommodation providers. Placement for 2026 has, by and large, been smooth and stable,” NSFAS said.
