By Johnathan Paoli

The National Student Financial Aid Scheme (NSFAS) has been placed under administration following the resignation of two board members, including acting chairperson Mugwena Maluleke.

The student funding agency has been grappling with governance instability, audit failures and disruptions to funding processes affecting thousands of beneficiaries.

NSFAS has also operated without a permanent chief executive for more than 30 months, a vacuum widely cited as a key factor behind tensions between the board and the minister over the appointment of a permanent CEO.

Manamela announced the appointment of Professor Hlengani Mathebula as administrator on Monday, in a move he said was aimed at restoring stability at the embattled scheme.

“This decision was not taken lightly. It follows a long process of engagement, legal assessment, governance intervention and consideration of alternatives,” Manamela said.

“We took this step because the government cannot ignore potential legal irregularities in the constitution of a statutory body entrusted with billions of rand in public funds and the futures of millions of students.”

Manamela outlined a series of governance and operational failures that led to the intervention, including a disclaimer audit outcome for the 2024/25 financial year, material irregularities flagged by the Auditor-General, and persistent weaknesses in internal controls.

A March directive from the minister highlighted “serious data integrity concerns”, unresolved student appeals due to system deficiencies, delays in ICT modernisation, and student accommodation failures “affecting student dignity and safety”.

“The real question became this: was NSFAS, as an institution, functioning effectively, sustainably and credibly in the interests of students and the country?” he said.

He said in light of the increasing instability within the board, each remaining board member was written to individually and afforded an opportunity to give their take on the challenges of the institution, possible alternatives and whether intervention was necessary.

In addition, he said the department also considered possible alternatives to placing NSFAS on administration.

These included filling vacancies, appointing further interim leadership, continued directives, intensified departmental oversight and allowing more time for governance processes.

But, the minister said no satisfactory alternative to administration was found.

“Ultimately, however, I was not satisfied that the ordinary governance arrangements were capable of adequately stabilising the institution within the urgency and seriousness of the challenges confronting NSFAS,” he said.

“I was also not satisfied that continued Board-led governance, in the prevailing circumstances, would provide the level of assurance required to restore institutional stability, protect students and safeguard public resources,” he added.

Manamela said Mathebula brings more than three decades of experience across governance, finance and higher education leadership, positioning him to lead the turnaround.

“[The] government is therefore confident that Professor Mathebula possesses the experience, independence, leadership capacity and institutional understanding necessary to stabilise NSFAS during this period,” he said.

Mathebula currently serves as the Director of Tshwane University of Technology’s Business School and has held senior roles in institutions including the South African Reserve Bank (SARB) and the South African Revenue Service (SARS).

According to the minister, Mathebula’s mandate will centre on “stabilisation, accountability, operational continuity and institutional renewal”, including strengthening governance, addressing audit weaknesses, accelerating ICT reforms, and resolving student funding and accommodation challenges.

The administrator will also be empowered to appoint specialist expertise in areas such as audit remediation, ICT systems, governance, finance and legal services.

Manamela moved to reassure students and institutions that the intervention would not disrupt funding operations.

“Let me state this clearly: student funding will continue. Allowances will continue. Appeals processes will continue. Universities and TVET colleges will continue engaging NSFAS operationally,” he said.

He added that the administration was a temporary but necessary step to rebuild credibility.

“The purpose of the intervention is precisely to protect continuity and restore confidence. This intervention is not about personalities. It is not about factions. It is about protecting students, stabilising a critical public institution, restoring accountability, and ensuring that NSFAS performs its mandate effectively and lawfully,” he said.

He also pointed to ongoing challenges in student accommodation, noting that while many universities have taken over provision, private providers remain part of the system.

“So the reality is that for some of the challenges to be resolved, we have to design an ecosystem that responds, you know, to the prevailing material conditions in our institutions, and to make life easier for students,” he said.

In closing, Manamela acknowledged the role of former and remaining NSFAS board members, saying many had served “under challenging circumstances and engaged the process in good faith”.

He reaffirmed the government’s commitment to ensuring NSFAS fulfills its mandate to poor and working-class students.

“Government remains fully committed to ensuring that NSFAS succeeds. We will continue engaging institutions, students, Parliament, National Treasury and the public as this process unfolds,” he said.

INSIDE EDUCATION

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