The Chairperson of the Portfolio Committee on Higher Education and Training, Tebogo Letsie, has expressed support for the Higher Education Minister's proposed plan to end the rental agreement for the National Student Financial Aid Scheme (NSFAS) headquarters in Cape Town.
The NSFAS headquarters in Cape Town has long been a point of contention for the committee, following its relocation from Wynberg to the Cape Town City Centre.
Recently, plans were announced to decentralise NSFAS operations, with new offices set to open in the Eastern Cape, Gauteng, and KwaZulu-Natal. As part of this restructuring, the current Cape Town headquarters will be closed.
The Cape Town office has been criticised for high rental costs, which no longer make business sense. The decision to move to Cape Town was initially driven by a lack of capacity in the old offices, but contracts with the landlord will now be terminated.
While many students have faced delays in receiving funding and allowances, along with accommodation challenges, NSFAS occupied a building with scenic views for R2.5 million per month. The committee has consistently opposed NSFAS's decision to relocate its headquarters to a location inaccessible to most of its clients.
Letsie stated that the termination of the Cape Town lease was long overdue.
With a budget larger than many national departments, the committee has always advocated for NSFAS offices to be based in Gauteng, where the majority of the student population resides.
Why the Cape Town Office Move Was Controversial for NSFAS
In early 2023, United Democratic Movement (UDM) leader Bantu Holomisa called for a criminal investigation into NSFAS's rental arrangements, alleging that the organisation paid nearly R20 million for office space between December 2021 and September 2022 without using the premises.
Former NSFAS spokesperson Slumezi Skosana explained that the decision to move to the Cape Town city centre was driven by the need to be closer to stakeholders and more accessible to students. He added that the previous offices in Wynberg, despite being close to a major transport interchange, were not deemed accessible enough for students.
However, the new Cape Town offices on the Foreshore are not located on major taxi or bus routes, and they require about a 2 km walk from the Grand Parade bus terminus.
Skosana denied claims that the building was left unoccupied during the initial months of the lease, explaining that the move was staggered, with departments relocating at different times. He clarified that NSFAS received a rental holiday for the first two months and paid 50% of the rent in the third month.
Per Capita Office Rent Exceeds Annual Student Accommodation Allowance
The Organisation Undoing Tax Abuse (OUTA) highlighted that the annual office space cost per employee exceeds the annual student accommodation allowance.
NSFAS signed a five-year lease for office space costing R166.9 million, translating to R74,000 per employee per year, compared to the R45,000 allocated annually for student accommodation.
The introduction of the R45,000 accommodation cap has caused significant issues for students attending institutions in metropolitan areas, where rent often exceeds the NSFAS allowance.
OUTA raised concerns over the fairness of these financial decisions, suggesting they benefit service providers more than students.
