The National Student Financial Aid Scheme (NSFAS) Act 56 of 1999 is the legal framework that governs how student loans and bursaries are managed in South Africa. It outlines who qualifies, how funds are distributed, how repayments must be handled, and the roles of higher education institutions and employers.
The Act applies to all students receiving NSFAS financial aid at public higher education institutions and remains the foundation for how NSFAS operates today.
Who Qualifies for NSFAS Loans or Bursaries
To qualify for financial aid under the NSFAS Act:
- You must be admitted to a public higher education institution
- You must apply using the official NSFAS form
- NSFAS assesses eligibility based on criteria set by the board in consultation with the Minister of Education
- Financial aid may be part loan, part bursary
- If a bursary is awarded, the student may not need to repay that portion if they meet the agreed conditions
When and How NSFAS Payments Are Made
Payments are made directly to the institution. NSFAS does not pay funds to students.
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| NSFAS Process | Explanation |
|---|---|
| Application | Must be in writing on NSFAS-approved form |
| Payment Method | Funds paid to the designated institution to cover tuition and accommodation |
| Course Link | Funding is tied to a specific course of study |
| Performance Clause | If a student fails, NSFAS can cancel funding |
| No Automatic Entitlement | Aid is not guaranteed; eligibility must be assessed |
Source: NSFAS Act, Section 18–20
How NSFAS Loans Must Be Repaid
Repayment rules are clear in the NSFAS Act:
- Loans must be repaid according to a written agreement
- Students must inform NSFAS of their address and employment status
- If you do not repay, NSFAS can report you to credit bureaus
- Your employer may be required to deduct repayments from your salary
- SARS must give NSFAS your employer details if requested
Official Responsibilities and Oversight
The Act also sets rules for other stakeholders:
- Institutions can administer NSFAS loans on behalf of NSFAS
- They must report on student performance and notify NSFAS if a student drops out
- Employers must deduct repayments once notified
- SARS must assist NSFAS with borrower employment information
- The NSFAS Board is responsible for governance, audits, and annual reports
NSFAS Act: Key Facts
- Applies to public higher education institutions only
- Establishes a legal obligation to repay loans
- Allows bursary conversion if study conditions are met
- Gives NSFAS legal power to recover debt via employers and SARS
- Ensures oversight through audits and annual reports
