The recent revelations from the Auditor-General's investigation have sent shockwaves through South Africa's higher education sector, exposing a startling irregularity in the National Student Financial Aid Scheme (NSFAS). Over 822 students recorded as deceased in the Department of Home Affairs database continued to receive bursary funding, alongside more than 14,000 ineligible students whose household incomes exceeded the threshold. This scandal underscores systemic flaws in beneficiary verification, diverting crucial resources from deserving students pursuing studies at universities and Technical and Vocational Education and Training (TVET) colleges across the country.

NSFAS, established under the National Student Financial Aid Scheme Act of 1999, plays a pivotal role in transforming access to higher education for low-income South Africans. It provides comprehensive bursaries covering tuition, accommodation, living expenses, and learning materials for over 744,000 students in the 2026 academic year, backed by a R54.3 billion budget allocation. These funds support both public universities like the University of Cape Town (UCT), University of the Witwatersrand (Wits), and Stellenbosch University, as well as 50 TVET colleges nationwide. However, persistent mismanagement has eroded trust, leading to widespread disruptions.

The bursary application process begins with students submitting proof of household income below R350,000 annually (or R600,000 for students with disabilities), South African citizenship, and acceptance into a qualifying program at an accredited institution. NSFAS cross-references data with the Department of Home Affairs for identity and vital status verification, universities for enrollment confirmation, and the South African Revenue Service (SARS) for income details. Step one involves online application via the myNSFAS portal; step two is provisional approval pending document upload; step three is final confirmation upon registration; and step four is disbursement—direct to institutions for fees and allowances to student accounts or accommodation providers.

Yet, the Auditor-General's probe highlighted critical lapses. Deceased students' records were not flagged promptly due to delayed updates from Home Affairs and inadequate real-time integration between systems. In one documented case from prior audits, payments continued for months post-death notification, with funds landing in inactive accounts potentially accessed fraudulently. This isn't isolated; historical 'ghost student' syndicates have exploited weak controls since 2020, prompting Special Investigating Unit (SIU) probes.

The investigation, presented during a joint accountability meeting convened by Minister of Higher Education, Science and Innovation Buti Manamela, pinpointed 822 deceased beneficiaries receiving undue payments. These cases spanned multiple years, with the bulk occurring between 2023 and 2025 due to backlog processing. Additionally, 14,257 students from households earning above the threshold were funded, totaling potential losses in the hundreds of millions of rands—exact figures await full SIU quantification.

Minister Manamela issued a formal directive to the NSFAS Board, mandating immediate cessation of payments to flagged beneficiaries, enhanced Home Affairs integration, and a full forensic audit. 'This diversion undermines our commitment to equitable access,' Manamela emphasized, noting four material irregularities under the Public Finance Management Act (PFMA) now under remediation.

• 822 deceased students funded post Home Affairs death records.
• 14,257 income-ineligible recipients.
• Systematic failure in bi-annual beneficiary reviews.
• Overlaps with prior SIU findings of R2 billion recovered from unqualified claims.

South African universities and TVET colleges bear the brunt of NSFAS disruptions. Institutions like Cape Peninsula University of Technology (CPUT) and Durban University of Technology (DUT) reported evictions of hundreds of students due to delayed accommodation allowances, sparking violent protests in early 2026. Sol Plaatje University in Kimberley saw over 500 students affected by non-payments, forcing administrative interventions.

Currently, universities and TVETs owe NSFAS R11.94 billion in unutilized funds from prior years, while NSFAS grapples with its own shortfalls. The SIU has recovered R1.7 billion from errant institutions like West Coast College (R5 million) and Northlink College, redirecting it to legitimate needs. This cycle strains institutional cash flows, delaying staff salaries and infrastructure upgrades essential for quality education.Read the full ministerial directive on gov.za

Enrollment surges—higher education headcount reached 980,000 in 2025—amplify pressures, with TVETs particularly vulnerable as they serve 597,000 students, many first-generation entrants from rural areas.

Photo by Zayyinatul Millah on Unsplash

Students at the University of Pretoria (UP) and University of Johannesburg (UJ) have protested R1,500 top-up fees amid NSFAS shortfalls, highlighting how irregularities exacerbate inequality. 'Funds for ghosts mean empty stomachs for us,' voiced a UJ representative during a 2026 rally. Dropout rates hover at 40% in first-year cohorts, partly due to funding gaps, per Council on Higher Education data.

Cultural context in South Africa, where higher education symbolizes upward mobility post-apartheid, makes these lapses poignant. Rural TVET students, reliant on allowances for transport, face acute hardships, with some commuting 100km daily.

Organisation Undoing Tax Abuse (OUTA) has long flagged NSFAS vulnerabilities, including 'ghost beds' in accommodation risking R1 billion. Universities South Africa (USAf) calls for direct funding models, echoing Finance Minister Enoch Godongwana's suggestions. Student unions like SAUS demand leadership overhaul, while NSFAS CEO Waseem Carrim insists reforms are 'turning a corner' with 2026 portal upgrades.

Experts like Professor Tim Dunne from Stellenbosch University advocate blockchain for verification, citing international models in Australia. Balanced views note NSFAS's successes: 70% graduate employability boost versus non-bursary peers.News24 coverage of the scandal

The SIU's probe into 1,055 parents and unqualified students has yielded R126 million in acknowledgements of debt, with criminal referrals pending. NSFAS reports R2 billion total recoveries, prioritizing 2026 appeals from 100,000+ students. NPA involvement signals potential prosecutions, mirroring the 2017 Sibongile Mani case where a Walter Sisulu student squandered R14 million erroneously disbursed.

• SIU: R1.7b from institutions, R300m+ from individuals.
• NPA: 20,000 students under probe for 2016-2021 irregularities.
• NSFAS: Biometric verification pilots at select TVETs.

Post-audit, NSFAS rolled out standardized allowances, national accommodation audits, and real-time Home Affairs API integration for 2026. Minister Manamela's directive enforces quarterly reviews and PFMA compliance. Proposals include university-direct payments, phasing out NSFAS intermediaries, and AI-driven fraud detection. PSA welcomes these, urging sustained oversight.

Photo by Chunjiang on Unsplash

This scandal amplifies calls for systemic overhaul amid 500,000 annual rejections despite demand. TVET prioritization under the National Development Plan aims to bridge skills gaps, with 70% graduates preferring trades. Future outlook: Stabilized funding could boost throughput rates from 55% to 70% by 2030, fostering innovation hubs at UJ and NWU.

Actionable insights for stakeholders: Students—appeal via portal by March 31; Institutions—strengthen enrollment audits; Policymakers—invest in digital infrastructure. AcademicJobs.com offers resources for navigating funding woes.

While the NSFAS dead students scandal exposes deep flaws, concerted reforms offer hope. By prioritizing verification and accountability, South Africa's higher education can reclaim its promise of inclusive access, ensuring no deserving student is sidelined by ghosts of the past.