Inside the NSFAS collapse: audits, resignations and system failures force government takeover

NSFAS was not placed under administration overnight — it followed a breakdown inside the system that government says it could no longer ignore.

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New details show the decision came after a “prolonged period of governance challenges, legal concerns and operational weaknesses” that threatened the stability of the entire student funding scheme.

At the centre of the crisis were serious red flags: a disclaimer audit outcome for the 2024/25 financial year, material irregularities flagged by the Auditor-General, and ongoing failures in how the institution manages data, payments and student appeals.

The situation worsened when members of the NSFAS Board — including the chairperson — resigned, leaving leadership gaps and ongoing disputes over governance and executive decisions.

Government also raised concerns about the legality of the Board itself, prompting court action — a rare step that signals how deep the problems had become.

For students, the crisis goes beyond headlines.

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System failures have already led to unresolved appeals, delays in modernising payment systems and serious accommodation issues affecting student safety and dignity.

NSFAS under administration: What students must do now as funding delays continue

In provinces like the Eastern Cape, where thousands rely entirely on NSFAS, these failures hit harder. For many families, funding is the only way to access university or TVET college — making any instability a direct threat to education access.

Government has now appointed Hlengani Mathebula as administrator, tasking him with stabilising operations, fixing governance failures and restoring confidence in the scheme.

His role will include addressing audit issues, fixing internal controls, improving payment systems and clearing backlogs in student appeals — all while keeping funding operations running.

Allowances, payments and student support are expected to carry on during the administration process, although whether system failures will be resolved quickly remains uncertain.

The bigger issue now is trust.

With 2026 planning already underway, students are not just asking if they will be funded — but whether the system responsible for that funding can be relied on.

This story builds on our earlier NSFAS funding guide and shifts the focus to the root of the crisis — showing how governance failure at the top could shape the future of student support.

The next key development will be whether the administrator can fix the system before the 2026 academic year begins.

Stay with Pondoland Times for updates as the recovery plan unfolds and its real impact on students becomes clearer.