NSFAS Considers Reporting Accommodation Providers For High Rent Prices

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The National Student Financial Aid Scheme wants to take action against student accommodation providers. This comes as many students cannot afford to pay some accommodation costs while the financial aid scheme introduced a policy limiting how much they will contribute to a student's accommodation costs.


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The National Student Financial Aid Scheme (NSFAS) is considering whether or not to report student accommodation providers to the Competition Commission. 

NSFAS claims that several accommodation providers reportedly raised their rent prices to astronomical levels and are refusing to lower them to accommodate the schemes' newly-introduced accommodation allowance cap. 

The Schemes spokesperson Slumezi Skonasa says that students were left without accommodation last week after accommodation providers imposed new rent amounts. 

Skosana says that many of the students attending the University of Pretoria, Wits University, Stellenbosch University and the University of Cape Town could not afford new rent amounts imposed by accommodation providers. 

The unaffordable accommodation does not only affect NSFAS students but parents from both poor and middle-class families who cannot afford monthly rent amounts of up to R9000. 

Skosana has warned that student accommodation and by extension, education, will be unaffordable if the matter is not urgently confronted by stakeholders.

NSFAS calls on all stakeholders to confront the issue before more damage is done to the future of thousands of 

NSFAS’ Accommodation Cap 

In 2023, NSFAS introduced an accommodation cap of R45,000. The cap was introduced to prevent profiteering and possible price collusion by private accommodation providers. 

NSFAS introduced this cap to manage the unjustified exorbitant costs of accommodation, which seemed to be based on price collusion. 

This cap was established based on data from the World Bank and the International Finance Corporation (IFC), using the "2021 Market Assessment: The Student Housing Landscape in South Africa" as a reference. 

The study categorised the student accommodation market in South Africa into three segments. 

The first segment represents affordable and NSFAS student accommodation, while the second segment costs between R3,000 and R4,500 per month, offering larger rooms and additional amenities. 

The third segment ranges from R5,000 to R8,000 and provides larger rooms with private kitchen and bathroom facilities, with some exclusive developments charging as much as R14,000.

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

NSFAS said they will engage with accommodation providers to consider accommodating students within the cap of R45,000.

 

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The National Student Financial Aid Scheme resorted to calling on private accommodation providers with the aim of resolving constant student housing challenges due to the shortage of beds. But now, the higher education sector is now faced with another threat to the stability of student accommodation.

 

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