A two-year investigation by the Organisation Undoing Tax Abuse has revealed systemic weaknesses in the National Student Financial Aid Scheme's student accommodation outsourcing, potentially costing taxpayers between R600-million and R1-billion. The probe highlights issues under former CEO Andile Nongogo and ex-chairperson Ernest Khosa. NSFAS acknowledges challenges and is cooperating with investigations.
The Organisation Undoing Tax Abuse (Outa) investigated NSFAS for two years, exposing flaws in a student-centred accommodation model introduced in 2023 under former CEO Andile Nongogo, who was removed on 23 October 2023, and ex-chairperson Ernest Khosa, who resigned in April 2024. NSFAS awarded five-year contracts to four providers—Xiquel Group, New Dawn Technologies, Training Young Minds, and Profecia IT—after competitive bidding. Outa noted Training Young Minds was initially disqualified but reinstated. By January 2023, NSFAS outsourced to 39 agents for property inspection and accreditation. Outa estimates R600-million to R1-billion diverted to these entities over the contracts, via a 5% deduction from accommodation payments, split 80% to providers and 20% to NSFAS. In eight months of 2025, R230-million was withheld from landlords. Rudie Heyneke of Outa stated: “If you look at the five years, we are looking at R1-billion.” Accreditation fees totalled R33-million, charged per bed (R100-R200) and split 80/15/5 among agents, NSFAS, and portals. Landlords like Samukelisiwe Khumalo reported payment delays and discrepancies, claiming R1,175 per student instead of R3,339.45; NSFAS CEO Waseem Carrim said no record exists of her. Outa flagged failures in inspections, with inflated bed counts enabling 'ghost students'; 10,000 of 250,000 beds are suspicious, including a Richards Bay property certified for 200 beds but appearing as a small house on satellite imagery. NSFAS plans to end ties with the four partners after legal review and welcomes Outa's findings. Outa demands an independent probe and criminal investigations. Khosa declined comment.