Buried in the final few pages of the Medium Term Budget Policy Statement (MTBPS), the National Treasury spotlights its fiscal risks.
One such risk is the National Student Financial Aid Scheme (NSFAS).
According to Treasury, it doesn’t have enough money to keep funding NSFAS at its current scale.
The government can’t afford to keep funding NSFAS
NSFAS is one of three fiscal risks National Treasury spotlighted in the budget.
The others are the Social Relief of Distress (SRD) grant and the cost of the government employee wage bill.
Treasury describes the scheme as a “significant risk.”
According to the MTBPS, the scheme’s “spending requirements exceed the resources available within the higher education baseline.”
But Treasury also admits it doesn’t know the extent of the funding problem.
So the measures it’s putting in place will only reduce “immediate funding risks.”
Treasury intends to mitigate the risk by pooling “available surpluses within the skills development system.”
Beneath the program’s threat to the budget is the hope that something extrinsic might happen to reduce the risk.
Beyond a financial miracle, the government only has one option: fewer people become eligible for NSFAS.
In practice, that could mean the government restricts eligibility or fewer South Africans apply for NSFAS.
More South Africans Applying for NSFAS
NSFAS is on track to receive 1 million applications.
By 19 October 2026, 30 days into the NSFAS admission process opening, 868 626 individuals had applied.
This is 66.3% higher than the total number of applicants in 2018, when NSFAS shifted its funding model from a combination of a bursary and a loan to a bursary.
That year, NSFAS also increased the eligibility criteria from R121 000 per annum to R350 000 and paid out R20.6 billion.
What is the plan to reduce the NSFAS fiscal risk?
The data suggests the plan to make NSFAS more affordable could start in primary school.
In 2017, the government budgeted R77.5 billion for higher education, referred to as “Post-school education and training.”
That same year, National Treasury budgeted R243 billion for basic education.
In the 2026 MTBPS, National Treasury budgeted R363.4 billion for basic education.
It budgeted R157.7 billion for higher education.
The basic education budget has increased 49.5% in 9 years.
However, over the same period, higher education’s budget has increased by 103.6%.
| Department | 2017 Budget | 2026 Budget | % Change |
|---|---|---|---|
| Basic Education | R243 billion | R363.4 billion | 49.5% |
| Higher Education | R77.5 billion | R157.7 billion | 103.6% |
Basic education getting less of the education pie appears to coincide with children dropping out of primary and high school.
A Department of Basic Education report shows more primary school children dropping out between 2018 and 2020.
According to the report, departure ratios (the number of children leaving school between grades) first appear for grade 6 learners in 2019.
With each passing grade, the figures worsen.