Colloquium on Student Accommodation and NSFAS Cap

Video The Portfolio Committee on Higher Education and Training convened this colloquium virtually to bring the full range of stakeholders responsible for, or affected by, student accommodation in the post-school education and training (PSET) system into a single forum to interrogate the evidence around the accommodation cap set by the National Student Financial Aid Scheme (NSFAS) and to develop practical, actionable recommendations for the sector ahead of the 2027 academic year. The colloquium brought together the Higher Education and Training Minister and Deputy Minister; Department of Higher Education and Training (DHET) Director-General and senior officials; NSFAS; the Department of Human Settlements; Universities South Africa (USAf); South African Public Colleges Organisation (SAPCO), presenting consolidated responses from colleges across all nine provinces; the South African Union of Students (SAUS); South African Technical and Vocational Education and Training Student Association (SATVETSA); Competition Commission; Property Practitioners Regulatory Authority (PPRA); and a number of private accommodation sector bodies, including the Private Student Housing Association (PSHA), South African National Student Accommodation Association (SANSAA) and South African Student Accommodation Providers Association (SASAPA). The Chairperson was explicit that the Committee regarded student accommodation as inseparable from the constitutional right to education, and not as a peripheral administrative matter. He framed the central tension the colloquium needed to resolve as one between four legitimate but competing interests: protecting students from unaffordable and unsafe accommodation; ensuring responsible use of public funds; preserving the sustainability of an accommodation market that the state itself depended upon; and holding institutions, NSFAS and private providers properly accountable for the money already being spent. The Committee rejected calls to simply "scrap the cap," regarding this as a slogan rather than a solution that would expose students to unregulated pricing. It likewise rejected returning accreditation to universities as a complete solution on its own, given evidence of misconduct at institutional level as well as at NSFAS. The Committee's stated desired outcome was not a report that "gathers dust on a shelf," but a coordinated, evidence-based settlement, potentially including a parliamentary inquiry, culminating in a DHET-led, cross-stakeholder report due by mid-November 2026, addressing the cap methodology, accreditation architecture, and a concession mechanism for NSFAS-funded students already carrying accommodation-related debt through no fault of their own, ahead of 2027 registration. The Minister situated the colloquium within a decades-long history of under-provision, citing the 2011 Ministerial Review's finding of about 108 000 university beds against a shortage of some 200 000, and traced the accommodation cap's 2023 introduction to the need for price discipline over public funds rather than an open-ended commitment. He identified seven systemic failures: persistent undersupply, including beds built but left unusable; the cap functioning, in some cases, as a price signal drawing lower-cost accommodation upward rather than as a ceiling; NSFAS having accumulated accreditation, placement and payment functions beyond its core financial-aid mandate, at the cost of institutional local knowledge; fragmented, non-reconciled data across NSFAS, institutions and providers, enabling both unpaid legitimate providers and funded "ghost beds"; accreditation treated as a once-off event rather than an ongoing obligation; slow infrastructure delivery; and diffused accountability, such that no single party owned the outcome for a stranded student. He proposed a "right student, right bed, right standard, right price, right time, right accountability" settlement built on differentiated, evidence-based pricing bands rather than a single national ceiling, and a rebalanced model in which government set policy and price regulation, NSFAS managed funding and payment, institutions managed local accreditation and placement, and providers accepted disclosure and inspection obligations, all underpinned by a single national property register. Several submissions supplied the Committee with figures precise enough to test the scale of the problem directly. NSFAS reported that accommodation funding had grown to R18.83 billion (university) and R3.52 billion (TVET) for 2026, now consuming 94% of the university-funded cohort's non-tuition allowance spend. It disclosed, under a legal opinion from ENS Africa, that it held clear power to set its own allowance but almost certainly no power to cap what a provider could charge in the open market. This was a distinction several Members returned to repeatedly, since it meant the funding gap fell, by design, on students or institutions rather than on providers. USAf, for its part, quantified that gap concretely. At the University of Cape Town alone, the shortfall between the cap and actual residence cost ran to R150 million a year, and an estimated R450–500 million cumulatively since 2023 – a figure it offered as illustrative of a nationwide pattern it undertook to document in full. DHET's own data cut the other way on accountability: of 135 353 university-owned beds, 9 907 stood empty pending renovation. This figure the Committee said was difficult to reconcile with simultaneous requests for billions in new infrastructure spend, particularly once set against the Special Investigating Unit (SIU) parallel findings on misused accommodation funding at other institutions. The private-provider associations, in turn, supplied the clearest ground-level cost data in the colloquium. SANSAA's Mthatha case study showed a 40% revenue decline for one Walter Sisulu University-area provider between 2024 and 2026, attributable to stacked deductions (a 5% solution-partner fee, a new 5% transport deduction, an 18% institutional-to-NSFAS payment-model shift, and a 12% non-metro discount) against operating costs that ran year-round despite ten months of funding . It proposed an evidence-linked R66 000 cap as a corrective benchmark. SAPCO's province-by-province college returns showed how uneven the underlying reality was: Lephalale TVET College considered the cap too generous given room-sharing, while Gert Sibande TVET College considered it "reasonable," and Vuselela TVET College in North West reported, starkly, that it had no capacity whatsoever to monitor externally accredited providers – accreditation there having been handed entirely to an NSFAS-appointed external body. Read together with the Competition Commission's still-open investigation into alleged price-fixing among NSFAS-accredited providers, and the Department of Human Settlements' confirmation that its NSFAS memorandum of understanding remained unsigned pending the appointment of a new NSFAS Chief Executive Officer, the submissions collectively depicted a system in which price discipline, accreditation integrity and institutional accountability had each, in different places, come apart from one another. Members' questioning surfaced recurring themes. Foremost among these was accreditation accountability: Members pressed NSFAS repeatedly on why none of its 39 accreditation agents had faced consequence management despite documented substandard gradings and established that the internal monitoring unit responsible for following up on flagged properties had been disbanded once NSFAS came under administration, with no equivalent function currently in place. A second recurring theme was the fairness of debt accrual. Members secured DHET's agreement, at a policy level, that a fully NSFAS-funded student who met every academic requirement should not be left carrying debt arising from the funder's own shortfall. However, DHET could not, in the meeting, resolve where that debt properly sat or how it would be reversed. A third theme was the underuse of existing infrastructure, with Members pressing both DHET and individual universities on why beds already built, in some cases since 2020, remained out of service, and querying delayed departmental concurrence for institutions wishing to apply their own accumulated interest income to accommodation projects. Members also obtained, for the first time on the record, the internal mechanics of the NSFAS solution-partner fee structure, establishing that one percentage point of the standard 5% deduction returned to NSFAS itself, amounting to R36 million year-to-date for 2026. The meeting closed with the Committee resolving to pursue a parliamentary inquiry in the week following the close of the parliamentary term, to be preceded by a comprehensive, jointly developed DHET report due by mid-November 2026, addressing accreditation reform, cap methodology, and a concession for currently indebted NSFAS-funded students, and to convene a further dedicated session specifically on NSFAS solution partners and accreditation agents, to which USAf and SAPCO would also be invited. The Chairperson noted the change from a physical to a virtual sitting for the colloquium was due to the proximity of the local government elections. Apologies were noted from the Minister of Higher Education and Training who would leave the meeting after his address due to a prior commitment. The USAf Chairperson and Deputy Chairperson submitted apologies through the USAf CEO, Dr Petiwe Matutu, who advised that the USAf Chairperson was abroad. The PSHA Chairperson, Mr Ndumiso Davidson, could not be present due to bereavement. As the DHET Director-General had a network disconnection, his submission was concluded by Prof Lewin. Delegates listed at end of PMG report.