Not all NSFAS funding is a bursary. If your support was granted as a loan, you are legally required to repay it once you start earning.
The NSFAS Act (No. 56 of 1999) gives the scheme special powers to trace borrowers, collect payments, and issue legal instructions to employers. This article explains what students and former beneficiaries need to know.
Why some NSFAS students must repay
Under the law, NSFAS offers two types of financial support:
- Loans, which must be repaid
- Bursaries, which do not need repayment — often converted from loans for strong academic performance
If you received a loan, NSFAS has a duty to recover it. These funds are then reused to support new students.
When you start repaying
You do not need to repay your NSFAS loan while you are still studying.
Repayment begins when:
- You leave your studies, and
- You start earning an income
There is no fixed repayment start date — it depends on your employment status and income level.
Once you’re working, you must inform NSFAS of your job and salary details.
What happens if you don’t pay
Failing to repay your NSFAS loan is a legal breach. The NSFAS Act allows the scheme to take the following steps:
- Trace you through SARS
- Send notice to your employer to deduct repayment amounts
- List you as a defaulting debtor if you ignore repayment
- Issue a garnishee order (no court needed)
- Apply penalties if you fail to update your details or respond
NSFAS loan recovery powers under law
NSFAS has unique tools that most lenders don’t have. These include working directly with the South African Revenue Service (SARS) and your employer.
By law, NSFAS can:
- Access your income information through SARS
- Send official letters to your employer to deduct repayments
- Penalise you for not reporting changes in address or job
- Require repayment immediately if you break terms of your agreement
Table: What NSFAS can do if you default
| Action by NSFAS | Legal Basis | Trigger |
|---|---|---|
| Trace borrower via SARS | NSFAS Act, Section 24 | Missing contact info |
| Demand employer deductions | Section 23(1)–(3) | Borrower employed |
| Garnishee-like order (no court) | Section 23(5) | Non-payment |
| List as defaulting debtor | Section 21(3)–(4) | Missed payments |
| Impose legal penalties | Section 22, 23 | Failure to update NSFAS |
Your responsibilities after studying
If you received a loan, the law says you must:
- Inform NSFAS of your employer and salary
- Keep your residential and postal addresses up to date
- Respond to all NSFAS letters and instructions
Failure to do this means your full loan becomes immediately repayable and legal action can follow.
