R53 billion government fund being flushed down the drain in South Africa
South African students are increasingly falling into online gambling, and are using NSFAS funds to do it.
The National Student Financial Aid Scheme (NSFAS) currently supports over 1.2 million people pursuing tertiary studies.
The fund faces continuous criticism from students for failing to adequately support South Africans as the cost of living rises.
In 2026, the fund opted to keep its living allowances unchanged from the previous year, sparking outrage among many people who rely on them.
The living allowances currently pay R15,000 per annum for students who do not live in a catered residence.
Those living in catered residences receive a R2,900 personal care allowance for necessities not provided by their accommodation.
However, the South African Responsible Gambling Foundation (SARGF) said these funds are increasingly being used for online gambling.
The foundation said it has received numerous reports from students seeking gambling addiction counselling that NSFAS funds were used to support their habits.
It said the growing trend of misusing NSFAS funds is “directly undermining public investment in higher education.”
It said the use of public funds is also exposing students to worrisome debt levels and a high amount of anxiety and depression.
“Internal intake records indicate that a growing number of students seeking counselling admit to diverting their NSFAS living stipends and book allowances to online sports betting,” it said.
Online betting is a growing concern in South Africa, and young people are being heavily impacted by this new form of gambling.
In the 2026 financial year, roughly 3,500 people received treatment for gambling addictions from the SARGF, and 2,670 of these were between 18 and 35.
The SARGF said student gambling addictions are moving from a betting problem into a public health crisis.
Struggles at NSFAS
The misuse of NSFAS funds comes as the organisation struggles to support the growing number of citizens who rely on it.
Students reliant on the funding scheme have said payments to residences often go unpaid for months, creating concerns about accommodation.
The funding backlogs follow years of financial mismanagement and administrative issues within the government fund.
Between 2018 and 2021, the Special Investigating Unit (SIU) found that approximately R5 billion had been spent irregularly by NSFAS to over 40,000 ineligible students.
The fund was also placed under administration in 2024, following an investigation into procurement irregularities and mismanagement.
This was due to student payments being made directly, rather than through traditional university financial systems.
The funds were paid directly through several fintech companies, which charged excessive transaction fees to students.
The direct system also led to technical glitches, leaving many people reliant on the scheme without funds for food or transport.
The procurement process for contracting these fintech companies was eventually found to be irregular and was confirmed by an independent investigation.
The procurement irregularities led to the NSFAS CEO, Andile Nongogo, being fired from his position and the board of directors being dissolved.
Following the controversies, many students were not paid by the group, as it struggled to fund its current number of beneficiaries.
In the last decade, the number of students reliant on NSFAS has grown exponentially, roughly doubling since 2015.
This number is expected to continue rising, placing increased pressure on the fund to accommodate qualifying South Africans.
NSFAS received an increased budget in the 2026/27 financial year, reaching 53.4 billion, roughly R2 billion more than the previous year.
The increase was made to help the fund support the growing number of South Africans from low-income backgrounds who want to pursue further education.
This shows how vital the government scheme is for many South Africans, raising further concerns about the current issue of online gambling using NSFAS funds.
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