The (NSFAS) presently pays R2.5 million a month for an office in Cape Town and intends to terminate its contract. This decision came after ParlParliament’s education portfolio committee examined the high rental cost in light of persistent financial difficulties, such as delays in student allowances.
Previously, NSFAS moved to a more costly facility in Cape Town’s Foreshore neighborhood from an office that cost R600,000 a month. The committee also disapproved of NSFAS’s Cape Town headquarters, which is remote from most of the organization’s Gauteng-based clients.
Nobuhle Nkabane, the higher education minister, concurred with the committee, saying it was not feasible to pay R2.5 million on rent. To decentralize NSFAS operations, she proposed setting up satellite offices in additional provinces and regional offices in KwaZulu-Natal, Gauteng, and the Eastern Cape.
Nkabane’s revelation that the present office wasn’t even big enough to fit all NSFAS staff further highlighted the necessity for restructuring.
Why did NSFAS Find the move to their Cape Town office controversial?
Leader of the (UDM), Bantu Holomisa, demanded a criminal probe of NSFAS’s leasing agreements at the beginning of 2023. The member of parliament said that the organization did not use the office space it paid about R20 million for between December 2021 and September 2022.
Slumezi Skosana Skosana, a former spokeswoman for the NSFAS, claims that the organization moved to the Cape Town city center primarily to be more accessible to students and closer to its stakeholders.
Even though the offices were just two blocks from a busy transportation hub with access to taxi, rail, and bus lines, he claimed that students could not get to the offices in Wynberg, outside of Cape Town.
The Cape Town NSFAS offices are located on the Foreshore and are about a 2-kilometer walk from the Grand Parade bus stop. They are not close to any significant taxi or bus routes.
Skosana refuted the claim that the facility remained vacant for the first two months and that the government bursary program covered rent. However, They conceded that the departments moved at various points during the staggered relocation.
We had a rental vacation for the first two months, and then, in the third month, we had to pay 50%. The accusation is baseless.
According to the Organization Undoing Tax Abuse (OUTA), the annual cost of office space per employee is more than the amount allotted for student housing.
In contrast to the R45,000 allotted for student housing each year, NSFAS has signed a five-year office lease for R166.9 million, or R74,000 per employee year.
Students enrolling in colleges in urban regions had unique challenges when the R45,000 NSFAS accommodation cap was implemented since their annual rent would surpass the quota for NSFAS accommodations. OUTA expressed doubts about the equity of these financial choices, claiming that service providers rather than students gain from them. For 2025, thousands of students are expected to apply for NSFAS financing. The government bursary plan has disclosed this, which NSFAS allowances loan recipients would not get.