NSFAS's collapse is a case study in what happens when a populist policy announcement meets a dysfunctional institution.
In December 2017, then-President Zuma announced free higher education for students from families earning below R350,000 per year — a signature policy from the ANC's Nasrec conference. The policy was well-intentioned but implemented without building the institutional capacity to manage it. NSFAS's annual budget ballooned from approximately R15 billion to over R50 billion.
The institution was not ready. IT systems built for a smaller programme collapsed under the increased load. Registration and payment processing was delayed for months each year. Hundreds of thousands of eligible students were left without funding at the start of academic years, unable to register, eat, or pay for accommodation.
Meanwhile, criminal syndicates exploited the system's weakness. Ghost student profiles were created using stolen identity numbers. In some cases, NSFAS funding was paid to students who did not exist, did not attend the institutions they claimed, or had already dropped out. The AG documented R12 billion+ in irregular expenditure — money that could not be verified as having reached legitimate students.
CEO Andile Nongogo presided over the chaos from 2019 until his removal in 2023. Minister Blade Nzimande, who served as Higher Education Minister for 14 years across two stints (2009-2019, 2019-2024), failed to act on governance warnings. NSFAS was eventually placed under administration, with Freeman Nomvalo appointed as administrator.
The NSFAS crisis is particularly cruel because the victims are South Africa's poorest students — young people trying to escape poverty through education, betrayed by the very institution designed to help them.