The National Student Financial Aid Scheme (NSFAS) finds itself in the eye of a governance storm, with the former board chair, Karen Stander, outlining systemic operational paralysis, which places the entire higher education funding ecosystem at risk.
Stander resigned from the position over the weekend. However, her resignation has not yet been accepted by higher education minister Buti Manamela. They are expected to meet in the upcoming week to discuss her resignation.
“Three other board members have also resigned,” Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage has told Business Day.
“This board was on track to address the rot at NSFAS. There is a network in NSFAS that wants to remove good governance … They have applied pressure on the board. Sadly, Manamela is not doing enough to address this situation, almost looking away and allowing the rot to continue.”
In the 2025 academic year, NSFAS is supporting about 811,000 students across universities and TVET colleges. Of those, 580,000 students are at universities and 231,000 at TVET colleges.
The budget for the current academic year is R48.7bn and it will increase to R51bn next year and R53.4bn in 2027.
Before her resignation, Stander flagged a breakdown in leadership and management at NSFAS, which has permitted institutions, including the National Treasury and accommodation providers, to bypass management and approach the board chair directly for funding resolutions.
In the letter to Manamela, Stander detailed how the board’s ability to govern and stabilise the student aid scheme was being crushed by internal dysfunction and external interference.
“NSFAS has reached a point of operational dysfunction. Management and staff are not responding to institutions, accommodation providers or government counterparts … This collapse in operational responsiveness is creating systemic risk and undermining confidence in NSFAS across the higher education sector,” Stander wrote in her letter dated October 28.
Stander lamented that the institution’s dysfunction placed her in an untenable position. “This breakdown in internal functionality … has placed the chair in the untenable position of being the de facto operational contact point.”
She added that attempts to address this directly were obstructed, writing that “any attempt by the chair to speak to the acting CEO about this has resulted in the acting CEO refusing to take the chair’s calls”.
In the letter, Stander alleges that the acting CEO, Waseem Carrim, almost authorised a decision that would have left thousands of students stranded mid-year.
“The acting CEO drafted and was on the verge of signing a directive stating that NSFAS would not resolve funding allocations arising from late student registrations.”
She warned that the move “would have destabilised the entire higher education sector” by halting support for late-registered students. “The chair became aware of the draft before it was signed and intervened,” the correspondence states.
Had she not, universities could have faced sudden budget exposure, and students would have faced exclusion from study.
Despite the cabinet having endorsed the development of a sustainable student funding model, the board chair reported that NSFAS management defied formal instructions to begin work. She wrote that the acting CEO “repeatedly failed to act” on board resolutions, and when directed to proceed with urgency, “laughed off the instruction, indicating he did not consider it a priority”.
DA MP Delmaine Christians said: “The DA has written to the chair of the portfolio committee on higher education and training demanding that minister Buti Manamela appear before the committee to account for the allegations raised in Stander’s resignation letter, as well as his own intervention in the matter.
“Minister Manamela must urgently investigate, table his findings before parliament, and outline concrete steps to restore governance, accountability and institutional trust at NSFAS.”
The NSFAS had not responded to queries by the time of publication.
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