The National Student Financial Aid Scheme (NSFAS) student accommodation cap is at the heart of South Africaâs campus chaos. While public debate has largely centred on a âfunding freezeâ, data analysis exposes a far more destructive operational reality: NSFASâ policy is allowing a massive utility deficit to gut metropolitan campus budgets while actively slashing cash funding for non-metro institutions.

Funding cap background

In 2018, NSFAS covered full fees for families earning under R350,000 a year. NSFAS funded full university tuition alongside actual student housing costs back then. Private housing allowances matched local institutional residence rates up to actual costs.

In 2023, NSFAS introduced a uniform national housing cap of R45,000. This single capping limit created severe financial deficits for urban university students. By 2025, NSFAS adjusted metro non-catered housing caps to R52,000, while setting a lower non-metro cap of R42,640. Students are responsible for paying any cost above these fixed limits.

On paper, the R52,000 metro cap appeared to offer relief, rising 15.6% since 2023 to roughly track headline Consumer Price Index (CPI) inflation â which Statistics South Africa currently reports at 5.0% annually (and 13.7% cumulatively since 2023). But inside South Africaâs metropolitan cores, that growth was a complete illusion

According to Statistics South Africa data, the cost of electricity, gas and other fuels skyrocketed by 41.0% over the same period (reaching an index value of 141.0 against the metro capâs 115.6). Because high-density inner-city residences require continuous power for 24/7 security, Wi-Fi, study centres, and industrial facilities, this 25.4-point operational gap has effectively gutted urban university budgets.

Daily Maverick spoke to Parliament, university administrations and national student unions about the accommodation cap issue. According to University of the Witwatersrand (Wits) Studentsâ Representative Council President Gilbert Nchabeleng, more than 3,000 NSFAS-funded students at Wits alone have encountered severe registration barriers directly linked to financial shortfalls created by the cap.

âThe reality is therefore unmistakeable: the accommodation cap is not merely a technical funding mechanism. In its current form, it contributes directly to student indebtedness, threatens housing security, delays graduation and undermines equitable access to higher education for the very students the NSFAS scheme was established to support,â said Nchabeleng.

Daily Maverick has reported that universities often withhold the certificates of students who have large debts; meanwhile, others delay students from registering for a new academic year.

âBlame is elsewhere â not at NSFASâ

Parliamentary committee on higher education chairperson Tebogo Letsie has defended the preservation of the R52,000 cap. Letsie argues that the blame lies with universities and private landlords, whom he accuses of rampant price-gouging and exploitative commercialisation.

âThe question you should ask is how do universities arrive at how much to charge,â said Letsie. He said universities willingly signed contracts with private providers at rates far above the government threshold, knowingly exposing NSFAS-funded students to shortfalls.

âIf student accommodation is not regulated, we will get to a point where accommodation costs R20,000 per month... instead of roleplayers asking for a just, transparent, and fair price,â said Letsie.

He dismissed the independent rebellion of campus leaders by making public accusations that local SRCs were being âcoercedâ into speaking out against the state funding scheme, adding that, âNot all students in our institutions are NSFAS-funded students. We do have self-funded students who come from the missing middle families. Those families are struggling to cope as we speak, and no one is talking about them. The cost of studying in SA will collapse if we donât regulate such things,â said Letsie.

Universities South Africa rejects Letsieâs position

Speaking on behalf of Universities South Africa (USAf), the representative body for the countryâs 26 public universities, CEO Dr Phethiwe Matutu pushed back against Letsie.

âUSAf strongly rejects the claim that universities are the primary drivers of high accommodation costs,â said Matutu. âThe evidence from our institutions does not support this narrative and overlooks the significant financial and administrative pressures universities face,â she said.

Matutu revealed that the R52,000 cap was implemented without any evidence-based research on actual institutional expenditures on food, security, support staff and municipal utilities. With inflation and electricity tariffs soaring, USAf says that it is no longer financially viable to provide safe, conducive housing under the frozen cap. To counter allegations that student housing was being run as a profit-generating scheme, USAf challenged accusers to present hard data.

âWhat we know is that there are institutions which are providing additional meals in residence, food parcels, food banks for NSFAS-funded students due to the inadequacy of the funding provided to these students. All of these interventions are meant to prevent student hunger,â said Matutu.

Wits Universityâs Dean of Student Affairs Jerome September confirmed to Daily Maverick that the urban, inner-city housing market made the NSFAS allocation drastically insufficient.

âWe can confirm that the NSFAS cap on accommodation is a major issue and that it does not sufficiently cover the costs of student accommodation in an urban, inner-city university in Johannesburg. These sentiments were raised with NSFAS in the past, and we will continue to raise these matters,â said September.

He continued. âWits has made every effort to ensure that residences remain affordable; for example, there was a 0% residence fee increase in 2025 for most residences, and a 4.2% increase in 2026, less than the ministerial recommendation of 6.2%. Students who cannot afford it can apply for a postponement of the residence deposit.

âFormer NSFAS beneficiaries affected by the accommodation cap introduced in 2023 were cleared for registration upon them signing an AOD (Acknowledgement of Debt) with the University. NSFAS beneficiaries who met all the requirements were considered for admission to residences, even if they had a residence shortfall because of the NSFAS accommodation cap. Students who owed R10,000 or less were allowed to register for the academic year,â said September.

The non-metro paradox

While metro institutions fight to absorb utility inflation, universities outside metropolitan boundaries face a double cliff. Because Stellenbosch University (SU) falls under a local municipality rather than a metropolitan district, its baseline private housing allowance drops to the non-metro rate of R42,640, a R2,360 cash cut from 2023 levels, despite operating in one of the most expensive property markets in the country.

SU spokesperson Martin Viljoen rejected fee-inflation claims, stating SUâs rates were strictly budgeted and governed to ensure financial sustainability and safe, standard-compliant student housing. He also said SU did not support a uniform national accommodation cap because accommodation markets and operating costs differed significantly across regions and institutions.

âIn line with the ring-fenced budget principle, all costs associated with the provision and maintenance of student accommodation are included in the fee calculation. Electricity alone accounts for approximately 10% of total operating costs, and electricity tariff increases have in recent years exceeded consumer inflation by between 7% and 12%. Other major cost drivers include building cost inflation, service costs, maintenance expenses and municipal rates and taxes, many of which have also increased above inflation over an extended period,â said Viljoen.

He said the actual cost of operating student residences had traditionally increased by between 2% and 3% above CPI annually. âIn contrast, NSFAS accommodation allocations have either remained unchanged or increased by no more than CPI. This has created a growing gap between the NSFAS accommodation allowance and the actual cost of providing student accommodation that meets the regulated norms and standards,â said Viljoen.

Competition Commission enters

According to the SRCsâ earlier statements, they said when NSFAS originally introduced the capping policy in 2023, it calmed students during protests by promising that the matter would be escalated to the Competition Commission for urgent market intervention.

Yet, three years later, Competition Commission spokesperson Siyabulela Makunga told Daily Maverick, âThe commissionâs records show that no referral or complaint was received from NSFAS.â While the commission was independently investigating minor price-fixing allegations levelled against a few private accommodation providers, âno market inquiry has been initiated at this stageâ, said Makunga.

âNot our problemâ

Responding to Daily Maverick, NSFAS maintained that the cap had been introduced to address historically uneven and, in some cases, unregulated accommodation pricing that placed pressure on both students and public resources.

It said that if accommodation costs exceeded the cap, that was not its responsibility: âNSFAS accredits accommodation and funds approved rates to ensure value for money, affordability and sustainability. Student debt arising from accommodation costs above the approved cap results from charges outside the NSFAS funding framework and not from NSFAS- approved rates.â

On new rates for the 2026 academic year, NSFAS said, âAnnual allowance adjustments are determined by the availability of funding through the DHET (Department of Higher Education and Training) in consultation with National Treasury. NSFAS can only implement and communicate revised rates once formal approval and direction have been received from the Department.

âAny approved adjustments will be communicated as soon as they are finalised.â

On the Competition Commission matter, NSFAS said this had been âreferred by DHET to the Competition Commission following complaints raised regarding student accommodation pricing. The outcome of that process was shared with DHET and NSFAS. As the referral was managed by the department, any public communication on the outcome remains within DHETâs discretion.â

SRCs vs SA Union of Students

SRC members say they feel betrayed by the South African Union of Students on the accommodation crisis after talks during the accommodation indaba in Durban, attended by DHET officials.

Wits SRC president Gilbert Nchabeleng told Daily Maverick that at the official SA Union of Students meeting convened shortly after the National Student Accommodation Indaba in July 2026, representatives of more than 16 SRCs supported the position that the NSFAS accommodation cap should be scrapped.

âDuring those deliberations, it was acknowledged that these concerns had been raised repeatedly with both the Minister and DHET, including during engagements held at the national student leadership induction programme in December 2025 where the SRCs told the Minister to scrap the cap, and he agreed.â

However, SA Union of Students spokesperson Dr Thato Masekoa blamed the SRCs. â[The] NSFAS accommodation unit was there the whole day, but no SRC was able to raise these; instead, the most vocal ones arrived late to the indaba, and some did not even come at all,â Masekoa said.

The SA Union of Students maintains that it is resisting a âblanket approachâ because property costs differ among metros, arguing that completely scrapping the cap would allow âgreedy landlordsâ to freely exploit state funds.

As the academic year progresses, Letsie told Daily Maverick that a colloquium was planned for 28 August 2026.

âWe have invited all roleplayers, including the Competition Commission, real estate association and private providers. We will get everyone to understand that this is not about the cap, but itâs about increasing access for a poor child,â said Letsie. DM