Few Universities Can Cope With NSFAS Accommodation Allowance Cap

NSFAS has introduced a cap on the student accommodation allowance, which some institutions disagree with. Private and institutional accommodations are both subject to the cap.

Few Universities Can Cope With NSFAS Accommodation Allowance Cap

Student accommodation allowances have been capped at R45 000 by the National Student Financial Aid Scheme (NSFAS). The purpose of this was to manage the unregulated increase in the cost of student housing.

Student accommodation caps ensured that students, parents, and NSFAS were not exploited. Private and institutional accommodations at certain universities currently exceed the cap of R45 000, so many students cannot afford to live near campus.

NSFAS relied on a study done by the International Finance Corporation, a division of the World Bank, to determine the accommodation costs for its beneficiaries. In addition to the type of accommodation, the accommodation cost was also considered.

Accommodation costs at the University of Limpopo average about R16 000 per year, whereas at the University of Cape Town (UCT) they average about R78 000. Therefore, the medium calculation is R38 000 per year.

NSFAS decided to set the student accommodation allowance cap at R45 000 based on the medium calculation figure. This data was shared with stakeholders and the cap was agreed to accommodate most universities.

However, some institutions were above the cap. These include:

• UCT
• Sol Plaatjie University
• Rhodes University
• University of the Witwatersrand (Wits)
• Stellenbosch University
• University of Pretoria

NSFAS believes some accommodation providers exploit the system by charging up to R90 000 per year. Some were unwilling to reduce their accommodation costs when approached.

To investigate possible collusions on student accommodation, NSFAS approached the Competition Commission. In order to ensure that students have access to affordable accommodation, NSFAS has also fast-tracked the accreditation of providers in these areas.