University students waiting to be placed in accommodation in Bellville, Cape Town.
Image: Armand Hough / Independent Newspapers
The National Student Financial Aid Scheme says it has begun implementing reforms after a comprehensive legal and forensic review of the student accommodation system.
NSFAS was commenting after an investigative report by the Organisation Undoing Tax Abuse (OUTA). It found that structural changes to the funding model have introduced multiple "middlemen" into a pipeline that was previously managed more directly by universities.
This redesign, according to the report, has created a fertile ground for exploitation and administrative chaos. The report also found that accommodation that was not fit for student use had been accredited.
NSFAS has acknowledged the OUTA report and said it will carefully review the findings and recommendations.
The entity said that the report follows engagement that officials held with OUTA, including provision of information after a Promotion of Access to Information Act (PAIA) request was made.
"NSFAS is fully committed to continuous improvement," NSFAS said in a statement.
"Relevant recommendations from OUTA's report will be integrated into our broader strategy for student accommodation management."
NSFAS said that after a legal and forensic review of the student accommodation system, it has begun implementing reforms.
The new actions include transitioning to direct payments to accommodation providers, moving away from reliance on solution partners. The phased implementation of this system will continue throughout 2026.
The Scheme added that the Special Investigating Unit is investigating student accommodation under a Presidential Proclamation, with NSFAS fully cooperating with the inquiry. Additionally, NSFAS has initiated a national audit of student accommodation accreditation for 2026.
“We will continue to work with stakeholders to address both short-term and long-term structural challenges in the student accommodation sector.''
It said for the 2026 academic year, NSFAS has introduced new controls to strengthen the processes for student registration, placement in accredited accommodation, and timely disbursements to accommodation providers.
The Scheme reported that student placement for the 2026 academic year has been relatively smooth and stable.
NSFAS also stressed that any student, accommodation provider, or staff member found to have defrauded the Scheme would face appropriate consequence management.
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