National Student Financial Aid Scheme NSFAS Act

National Student Financial Aid Scheme NSFAS Act.

NSFAS was established according to the National Student Financial Aid Scheme Act (Act 56 of 1999) and incorporated TEFSA (Tertiary Education Fund of South Africa). From 1993 to 2000, TEFSA was the primary non-profit company in terms of Section 21 of the Companies Act and ceased to operate in July 2000. All existing loans on the TEFSA books were transferred to NSFAS.

National Student Financial Aid Scheme NSFAS Financial Aid

The NSFAS Act enables any student to apply for a bursary from NSFAS, but allows the board to impose conditions, generally, or in respect of a particular loan or bursary. Such conditions include the use of the means test and the loan conversion of up to 40 percent of any loan as incentive for academic success.

It provides for payment by NSFAS of the amount of the loan or bursary “to the designated higher education institution”, rather than to the applicant. It also allows NSFAS to enter into what is in effect an agency agreement with higher education institutions (HEIs) or further education and training (FET) colleges, in terms of which they are authorised to:

  • Administer bursaries granted to students of the institution.
  • Receive loan and bursary applications from students.
  • Consider and assess the applications in light of the criteria for the granting of bursaries determined by NSFAS.
  • Grant bursaries if the criteria are met after ascertaining that funds are available.
  • Enter into a written agreement with a borrower or bursar in accordance with the provisions of the Act and on the terms and conditions determined by NSFAS.

The Act defines a loan as “a loan granted to a person by NSFAS in order to enable the person to defray the costs connected with his or her education at a designated higher education institution, and those connected with the board and lodging of that person for purposes of attending the institution”. The Act allows NSFAS to determine the parameters under which bursaries are granted to students, ensuring that students are provided with sufficient funds to cover their costs of tuition and/or residence, and any further reasonable provisions.

National Student Financial Aid Scheme NSFAS Loan Recoveries

The Act requires NSFAS to “recover loans” as one of its fundamental functions and provides instruments not typically available to public or private entities to enable it to do so. These include:

  • Access the South African Revenue Service (SARS) database to trace borrowers and establish the employment status and income level of borrowers.
  • An effective right by NSFAS to issue extra-judicial garnishee orders to the employers of borrowers to enforce deduction of repayment instalments.
  • It requires borrowers, who are no longer studying to inform NSFAS periodically of their employment status, income level and residential addresses and other contact details.
  • It creates penalties for debtors, who fail to adhere to these requirements.

Click here to download the NSFAS Act 56 of 1999.

For the submission of legal documentation for the attention of the National Student Financial Aid Scheme email [email protected]. Legal documentation not submitted and logged through this dedicated mailbox will be deemed invalid and will not receive timeous attention.



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