South African students are reporting widespread evictions, mounting debt and academic exclusion as universities, student leaders and Parliament clash over a rigid National Student Financial Aid Scheme housing cap that critics say is gutting campus budgets and deepening inequality between metropolitan and non-metropolitan institutions.
At the centre of the crisis is the NSFAS accommodation allowance, which has shifted from covering actual housing costs to a fixed national ceiling that leaves thousands of students unable to afford rent in major cities. In 2018, the scheme funded full tuition and actual residence costs for students from families earning below R350,000 annually. Private housing allowances matched institutional residence rates up to the real cost of accommodation.
That changed in 2023 when NSFAS introduced a uniform national housing cap of R45,000. The single limit created immediate deficits for students at urban universities where market rents far exceed the allowance. By 2025, the scheme adjusted the cap to R52,000 for metropolitan non-catered housing and R42,640 for non-metropolitan institutions. Students are now responsible for any shortfall above these fixed amounts.
On paper, the metropolitan cap appears to have kept pace with inflation. The R52,000 limit represents a 15.6% increase since 2023, roughly tracking the 13.7% cumulative consumer price index rise reported by Statistics South Africa over the same period. Annual inflation currently stands at 5.0%.
But the aggregate figure masks a sharper reality in metropolitan cores, where rental inflation has consistently outpaced headline CPI. Student leaders and university administrators argue that the cap fails to reflect actual accommodation costs in cities such as Johannesburg, Cape Town and Pretoria, where suitable student housing regularly exceeds R7,000 to R9,000 a month — well above the R4,333 monthly equivalent of the annual cap.
The financial strain is now visible across the system. Universities in metropolitan areas report growing utility deficits as they absorb costs for students who cannot pay top-up fees. Non-metropolitan institutions face a different pressure: the lower R42,640 cap has reduced cash flow for residence operations, threatening maintenance and service delivery on campuses that historically relied on NSFAS funding to sustain student housing infrastructure.
Parliament’s higher education portfolio committee has heard testimony from vice-chancellors, student representative councils and NSFAS officials, but no legislative remedy has been tabled. The Department of Higher Education and Training has acknowledged the disparity but maintains that the cap system is necessary to manage the scheme’s overall fiscal envelope.
Student organisations have warned that the current trajectory will deepen spatial inequality in access to higher education, effectively pricing poor and working-class students out of metropolitan universities. Eviction notices, academic deregistration for fee arrears and mental Health crises linked to housing insecurity have been documented across multiple campuses since the start of the 2025 academic year.
NSFAS has not responded to detailed questions on whether the cap will be reviewed before the 2026 funding cycle. The scheme’s board is expected to meet before the end of the second quarter to assess the 2025 disbursement outcomes.
