By Johnathan Paoli
The Economic Freedom Fighters (EFF) has written to the National Student Financial Aid Scheme (NSFAS) following allegations of irregular, wasteful and potentially fraudulent expenditure amounting to at least R145 million paid to private student accommodation intermediaries.
EFF Higher Education Portfolio Committee member Sihle Lozi wrote a letter to NSFAS acting CEO Waseem Carrim asking for the details of the contracts.
“These questions go to the heart of transparency, legal compliance and financial accountability. Given the public interest and the scale of taxpayer funding involved, we trust that you will treat this matter with the utmost seriousness and urgency,” Lozi said.
The revelations, which were raised during a parliamentary sitting, have sparked renewed concerns over governance, transparency and accountability within the embattled scheme.
The controversy centres on four private companies contracted by NSFAS to facilitate student accommodation services and process payments to landlords.
According to figures presented by Carrim, the companies collectively charged a 5% transaction fee on all disbursements, resulting in R145 million in commissions from R2.9 billion disbursed in 2024 alone.
However, this figure could be significantly higher when calculated over the full R14 billion that NSFAS spends annually on student housing.
In the letter, Lonzi raised alarm at the growing crisis of defunded students, unresolved appeals and chronic delays in disbursements that have plagued the higher education sector for years.
Of particular concern are whistleblower allegations that the four intermediaries were never legally authorised to disburse payments to landlords, but allegedly assumed the role without formal contractual amendment or proper regulatory approval.
The EFF has demanded that NSFAS furnish answers to eight questions. They include the full legal identities of the four companies involved, whether their original contracts permitted them to manage financial transactions, a copy of each contract, including dates of award, scope, and payment terms, the total amount paid to each provider since the inception of their contracts, proof of valid Financial Services Provider (FSP) licences for each company, and details of the categories of services they are authorised to perform.
The situation has drawn significant attention due to the broader issues plaguing NSFAS, which has repeatedly faced accusations of mismanagement, corruption and failure to deliver essential support to qualifying students.
Earlier this year, the scheme came under fire over its direct payment system, which had already been marred by delays, system errors and complaints from students and landlords alike.
Despite repeated interventions and leadership changes, including the appointment of Carrim as acting CEO following a governance shake-up, critics say the problems have persisted and worsened.
In Parliament, Carrim confirmed the 5% commission model, justifying it as a standard facilitation fee.
With millions of rands potentially at stake, and thousands of students left in limbo, the EFF has warned that it would seek court intervention if satisfactory responses were not provided by the deadline of 9 July.
INSIDE EDUCATION
