'Decentralise student funding' -- Prof Eugene Cloete highlights systemic weakness underlying CPUT unrest

Professor Eugene Cloete is chairperson of the Cape Chamber's Innovation Capability Business Environment Portfolio Committee. He writes here in his personal capacity.

The NSFAS funding crisis has moved from a persistent irritant to what can now genuinely be called the single greatest institutional risk facing South African universities. What began as isolated complaints about late payments has escalated into full-blown campus breakdowns, and the events at Cape Peninsula University of Technology over the past two weeks illustrate exactly how quickly a funding administration failure can cascade into academic collapse.

CPUT like many other universities has a substantial student debt. Students and universities have pointed out that NSFAS only pays between R50,000 and R55,000 for accommodation while accommodation cost R65,000 to R70,000 a year, leaving them to carry an unaffordable shortfall. 

At CPUT what started as marches and memoranda turned into arson, and the university ultimately shut down all campuses after a fire attack on the Old Education Building at the Bellville campus, forcing management to suspend all academic activities and evacuate residences. 

This is not an isolated flashpoint; it is a preview of what continued NSFAS dysfunction will keep producing across the sector. It's also worth adding that campus protests, however understandable the frustration, are misdirected when the underlying failure sits with NSFAS and its parent department, not with the universities themselves. Institutions like CPUT are victims of the same broken system as their students — they depend on timely, accurate NSFAS disbursements to remain financially viable, and disruptions caused by protest action only compound the funding shortfall by adding property damage, lost academic time, and reputational harm to an already precarious balance sheet. Directing pressure at university management, when management has no control over NSFAS's payment timelines or verification failures, achieves little beyond further destabilising the institutions students rely on. 

The more effective and appropriate target for student action is government — the Department of Higher Education, NSFAS's board and administration, and Parliament's oversight committees — since it is at that level that the funding model, budget allocations, and governance failures actually need to be fixed.

The scale of the underlying mismanagement is now a matter of official record, not conjecture. In a report released this week, the Public Protector found that NSFAS has failed to fulfil its mandate, with more than 40,000 students improperly funded to an estimated value of R5.1 billion, of which only R2 billion has been recovered. The investigation also flagged serious failures in the administration, governance, funding, coordination and oversight of student financial aid, and found that NSFAS was unable to resolve 80% of the queries received through its contact centre because they had to be escalated to internal units. Perhaps most tellingly, independent reviews, including a 2021 ministerial committee of inquiry, concluded that NSFAS has functioned in a near-permanent state of crisis, and the scheme has been placed under administration three separate times in the past eight years because it kept struggling to manage itself. This is precisely the pattern that has emerged: a centralised body absorbing enormous administrative cost while simultaneously failing the students it exists to serve and creating the conditions in which funds are misallocated or exploited. A single centralised bureaucracy processing applications, appeals, and disbursements for hundreds of thousands of students across dozens of institutions has proven structurally unable to do so reliably or transparently.

My recommendation is a decentralised administrative system where universities do the administration. Universities already have the registration systems, financial aid offices, and direct relationships with their own students to verify eligibility and manage disbursement far more responsively than a distant national call centre ever could. Decentralising administration to institutional level would shorten the distance between the person needing funds and the body approving them, create clearer lines of accountability when things go wrong, and remove the single point of failure that currently means one entity's dysfunction paralyses the entire sector at once. It would not eliminate the need for national funding and policy oversight, but it would separate policy-setting and funding allocation (appropriately centralised) from day-to-day administration and payment (arguably better handled locally, with strict audit and reporting obligations back to a slimmed-down national body).

What makes the current moment particularly dangerous is that the pattern is now self-reinforcing: funding delays and shortfalls trigger protests, protests trigger closures and property damage, closures interrupt the academic year and damage institutional finances further, and the resulting instability makes it harder for universities to plan or budget around NSFAS at all. Left unaddressed, this is no longer a student welfare issue but a solvency and reputational risk to the university sector as a whole.