R45k accommodation cap is sustainable, says NSFAS

An annual, capped, R45,000 accommodation fee per student in public higher-learning institutions is sustainable, says the National Student Financial Aid Scheme (NSFAS).  

Its spokesperson, Slumezi Skosana, said the entity changed its policy last year as the price of such accommodation was becoming unstainable. 

He said the scheme wanted to ensure the money was well spent and new accommodation that would eventually be owned by universities and Technical Vocational Education & Training (TVET) colleges was built.  

“As of last year, accommodation at university residences ranged from R28,000 to R90,000 a year. Private accommodation providers charge up to R90,000 a year. This is unsustainable.” 

Skosana added that NSFAS's process to unpack the cost structure of accredited student accommodation segments and understand what the rental included was informed by higher education and training department norms and standards.  

He said the scheme worked out the blanket cap according to World Bank/IFC 2021 Market Assessment findings in three categories.

The first and lowest-income bracket was the affordable NSFAS student accommodation market. 

The second, the mid-student market, targeted middle-income students with an affordability range of between R3,000 to R4,500 a month. Such accommodation typically provided larger bedrooms compared with the NSFAS market, and came with amenities and services such as student support services, entertainment areas and other social amenities. It was often occupied by students who “top up” their NSFAS accommodation allowances. 

The third segment was the upper-end market, typically integrated into a purpose-built student accommodation development. Such premium rooms or units consisted of larger rooms, private kitchens and bathrooms, and higher-quality finishes. These premium packages may also include the use of student services and other amenities. The price point of upper-end student housing was between R5,000 and R8,000 a month, but in exclusive nodes and developments could top R14,000. 

“Given the diversified market for student accommodation, NSFAS settled for the middle ground, which is the second market segment, based on affordability,” Skosana said. 

He added that the scheme was engaging all stakeholders affected by student protests and would respond when engagements were completed. 

“NSFAS has servicing officials dedicated to each institution to support students with NSFAS-related queries,” Skosana said.  

Last month the entity said it was considering reporting students' accommodation providers to the Competition Commission for possible collusion and price gouging.  

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