Nearly 4,000 East London tertiary students and their families, now under SIU (Special Investigating Unit) investigation for irregularly receiving NSFAS funds between 2016 and 2022, claim desperation drove them to accept the aid, citing a lack of financial support available for “missing middle” students.
In 2022, the SIU launched an investigation into alleged billions of rand paid out to students who were not eligible to receive NSFAS funding given their annual household income was above R350,000.
The investigation has so far uncovered 40,000 students across the country who were incorrectly funded to the tune of R5.1bn, which includes 3,842 students from East London.
According to SIU spokesperson Kaizer Kganyago, the unit found that NSFAS, when conducting financial eligibility tests, did not take into consideration information from income declared at Sars, which may have enabled students to misrepresent their annual household income when applying for funding.
Kganyago confirmed that the SIU has made contact with the students who were flagged for irregularly receiving funds, and this cohort had since signed acknowledgement of debt (AoD) notices confirming their families’ annual household incomes were above R350,000 when applying, and consenting to a repayment plan to return the money to NSFAS.
Some of these students will now have to pay back sums of more than R200,000, with interest, and any payments missed according to the payment plan may lead to legal action.
“We are currently referring matters to the National Prosecuting Authority and the NPA will decide whether or not to prosecute students who misrepresented their income but each case will be handled on its merit.
“NSFAS communicated their funding criteria across the board and everyone knew of the funding threshold.
“Nobody was forced to apply even though they did not qualify for funding,” Kganyago said.
“Students who were incorrectly funded had a major impact on the NSFAS fiscus and condemned students who were legitimately qualifying to a lifetime of poverty together with their families.
“Those incorrectly funded students must repay ill-gotten funds to fund legitimate and needy students.”
The mother of one of the students, who spoke to GO! & Express anonymously, tearfully said they felt forced to apply for NSFAS funding.
“We had exhausted all our options with the banks and we were so deeply in debt as a family it was impossible for us to get a student loan for my son.
“We took the chance and applied for NSFAS even though we did not qualify because we were desperate to give our son an opportunity to have a future and had heard of other families doing the same.
“Families have been crying for years about funding from the state for those of us who earn above R350,000 per annum and this cry has been ignored.
“When you are desperate and you have exhausted all options, you do what you have to for your child.”
To address the dearth of funding for missing middle families, NSFAS introduced the comprehensive student funding model, otherwise known as the missing middle loan scheme, in January 2024, with a R3.8bn budget over three years, to assist students with household incomes between R350,000 and R600,000 annually.
Its rollout has faced significant challenges, as despite receiving nearly 23,000 loan applications by February 2024, only 139 were approved provisionally, as NSFAS struggled with technical and manual processing issues due to its bursary-focused infrastructure.
This left thousands of missing middle applicants excluded from the funding. When questioned about improvements made to address these challenges ahead of the 2025 academic year, NSFAS spokesperson Ishmael Mnisi’s confusing response issued to GO! & Express stated:
“NSFAS has introduced an online application process and implicated [sic] new improvements to the application process that includes minimal request for supporting documents, unless further validation is required from applicants.
“Sassa applicants do not need to submit any documents and only NSFAS consent form is compulsory for all non-Sassa beneficiaries.”
University tuition fees are set to rise by an average of 5% in 2025, which added to the financial burden on families already struggling with increasing costs, Paul Esterhuizen, CEO of School-Days, an NGO dedicated to funding education access, said.
Esterhuizen said inflation affected all education-related expenses, including food, books, clothing, and accommodation, leaving families with little relief.
“Meeting education fee obligations does not get any easier for those who have not had the means or saving capacity to plan ahead,” he said.
“It is tough out there as breadwinners hold onto their employment and struggle to support the learning aspirations they have for their children. Inflation latches onto all areas of family households.”
In response, School-Days has expanded its offerings with programmes such as Varsity-Days and the Plan-to-Pay initiative in partnership with Standard Bank, enabling members to earn and redeem “Edu-Time Points” exclusively for education fees.
East London parents paint a stark picture of the financial strain facing missing middle families, emphasizing the burden of relying on student loans to cover rising varsity costs.
The lack of funding options leaves families under immense stress with increasing household debt.
Last year, a top-performing East London student who made local academic history, faced an uncertain future due to a lack of financial support, despite having achieved above a 90% average for matric and then going on to excel in his first year MBChB studies.
Despite applying for scholarships during his matric year, he received no assistance, highlighting the dire funding gaps for missing middle students, even those pursuing essential professions in healthcare.
One parent said urgent government intervention was needed to address the systemic exclusion of missing middle students from financial aid.
Another, who said she was forced to enroll her children in correspondence courses to avoid falling into unmanageable debt, said institutions needed to create equal opportunities for all students and reevaluate bursary allocation criteria to focus on merit rather than socio-economic categories.
Another father added: “As a parent, 18 years ago when you envisage planning for your child’s university tuition, your savings and insurance policies are based on what you can afford and they grow at an average of 7-10%, but university fees increase from 15% to 20% per year, and added to that the accommodation, electricity and food which for the last 20 years has been on a steep increase.
“I feel as a middle class in proportion to our income against tax we are the key contributors to the government budget yet we don’t share in any bursary funds.
“Bursaries should be rewarded to those students that put effort into their education and are deserving of it and a skills assessment of SA needs to be reflected in the decision of which courses bursaries are provided for.”
