NSFAS loans and bursaries are not informal or automatic. They are governed by legal rules — and students who apply must understand what the law says about eligibility, conditions, and payment.
The National Student Financial Aid Scheme Act (No. 56 of 1999) gives NSFAS the power to offer funding, sign contracts, and decide how financial support is managed through institutions.
Who qualifies for NSFAS support
The law allows any student to apply for NSFAS support. However, the NSFAS board sets the eligibility rules, which include financial need (means test) and academic performance.
Key points:
- NSFAS is for students accepted to public universities or TVET colleges
- Students must meet the funding criteria set by NSFAS
- Students sign a written agreement for each loan or bursary
Some bursaries are converted from loans. Up to 40% of a loan can be changed into a bursary if the student performs well academically.
What the law says about how NSFAS pays
Students don’t receive money directly. By law, NSFAS must pay the designated institution, not the individual.
This means:
- Tuition, residence, and allowances are paid to the university or TVET college
- NSFAS can enter into agreements with these institutions to act on its behalf
- Institutions help with assessments, agreements, and payments
Role of universities and TVET colleges
NSFAS works closely with institutions that have signed legal agreements with it. These are known as designated higher education institutions.
Their role includes:
- Receiving and assessing NSFAS applications
- Signing funding agreements with students
- Administering payments according to NSFAS rules
- Reporting on students’ academic progress and withdrawals
If a student fails academically, the institution must inform NSFAS. The funding can then be suspended or stopped.
NSFAS bursary and loan conditions
All NSFAS loans and bursaries are subject to strict conditions set out in a formal agreement.
According to the NSFAS Act:
- Each bursary must be linked to a specific course of study
- Money must only be used for education-related costs
- Poor performance can lead to cancellation of funding
- Repayment rules apply to loans — but not bursaries
Legal conditions for NSFAS funding
| Condition | Loan | Bursary |
|---|---|---|
| Must sign written agreement | ✅ | ✅ |
| Linked to a specific course | ✅ | ✅ |
| Paid to institution, not student | ✅ | ✅ |
| May be suspended for failure | ✅ | ✅ |
| Needs to be repaid | ✅ | ❌ |
| Can be converted (if successful) | ✅ | ✅* |
*Some bursaries are converted from loans based on academic performance
