Students and institutions have expressed disappointment with the decision taken by the Department of Higher Education and Training (DHET) along with the National Student Financial Aid Scheme (NSFAS) to cap accommodation annual allowance at R45,000 for the 2023 academic year.
The announcement, along with 
many other grievances has sparked intense student protests at institutions across the county.
Higher Education Minister, Blade Nzimande explains that the decision to cap student accommodation at R45,000 per annum was estimated by the recent “World Bank/IFC 2021” Market Assessment: The Student Housing Landscape in South Africa” study.
Nzimande noted this whilst responding to a written parliamentary question by EFF MP Naledi Chirwa on whether there was any analysis and research done that adequately determined what amount is required by students for housing across all geographical areas.
According to the study, student accommodation in South Africa is categorised in 3 market segments:
- The first, and lowest-income bracket, is the affordable and NSFAS student. accommodation market.
- The second market segment is the mid-student accommodation market. This market targets middle income students with an affordability range of between ZAR 3,000 – ZAR 4,500 per month.
- The final market segment is classified as the upper-end student accommodation market and is typically integrated into a Purpose-Built Student Accommodation development. The price point of upper-end student housing between ZAR 5,000 – ZAR 8,000 per month but can be as high as over ZAR 14,000 in some exclusive nodes and developments.
Nzimande added that given the diversified market for student accommodation, NSFAS settled for the middle ground with the second market segment based on affordability.
Furthermore, Chirwa also asked Nzimande whether his department intends to take any steps to resolve the financial difference suffered by the students who rely on financial assistance.
To which he responded:
Yes, there is a process through NSFAS to unpack the cost structure of various student accommodation segments to understand what the accommodation rental includes. This will assist government to negotiate with the landlords and institutions the type of costs that government will consider and fund for the NSFAS funded students.
Nzimande says that this process will also avoid incidences of double dipping from other grants offered by the Department to institutions.
Additionally, Nsfas is also developing a grading process to be able to cater for costs where there are services offered over and above the Minimum Norms and Standards for Students Housing.
Nzimande notes that universities have to allocate housing that is within the cap for NSFAS funded students and that the bursary scheme will further be engaging with accommodation providers to consider accommodating NSFAS funded students within the R45,000 cap amount.
Meanwhile, there have been calls for Nsfas to scrap the accommodation cap, as students stress that they will not be able to afford any of the month-to-month top ups on rent now that their allowance has been capped.
