South Africans felt the pinch as the Finance Minister revealed the national budget, notably with a 0.5% increase in VAT. While a lesser burden than the previously projected 2% hike, this adjustment still signals a rise in the cost of almost all goods and services.
Adding to this, another 0.5% VAT increase is planned for the following year, creating a landscape of ongoing financial adjustments for consumers.
However, there's a brighter outlook for aspiring students seeking higher education. The National Student Financial Aid Scheme (NSFAS), a crucial lifeline for students attending South African universities and TVET colleges, is set to receive a significant budget increase.
The government's commitment to education is evident in the allocation of R55.4 billion to NSFAS for the upcoming year, a notable jump from the previous R53.6 billion. This substantial increase aims to support more students in their pursuit of academic qualifications.
Allocations to universities will see a 1.5% rise, reaching R48.4 billion and funding for TVET colleges will see a 4.4% increase, totaling R14.2 billion. This reinforces the government's focus on technical and vocational training, crucial for the country's economic development.
NSFAS Allowances Increase For 2025
The Minister of Higher Education, Nobuhle Nkabane, recently announced that NSFAS allowances will be increased for 2025. This move aims to support student livelihoods by providing more financial assistance.
Minister Nkabane announced:
We have considered the cost of living which is very high as well as some of the socio-economic challenges that our people are facing every day so we have decided, working closely with USAf and NSFAS as well as student formations to adjust student allowances for this financial year to 4%.
One of the key changes is the increase in NSFAS allowances for TVET College students. Their annual allowance will rise from R10,000 to R14,600—a 46% increase.
Despite the welcome surge in NSFAS funding, it's important to acknowledge the annual escalation of university and college fees. These rising costs will inevitably absorb a considerable portion of the newly allocated funds, potentially impacting the overall benefit for students.
While the budget increase is positive, the real-world impact will depend on how effectively it addresses the increasing financial burdens faced by students.
The Higher Education and Training department expects to be able to fund 2.1 million students with loans and bursaries over the next 3 years. The 4,4% increase this year is expected to be matched next year.
These transfers are expected to increase at an average annual rate of 4.4 per cent, from R46.6 billion in 2024/25 to R53.1 billion in 2027/28.
Last year NSFAS introduced a loan option to cater for 'missing middle' students - those from families whose household income falls between R350 000 and R600 000. The funding for this scheme is provided by the National Skills Fund at a cost of R3 billion over the medium term. This is budgeted to be about R1 billion per year.
Looking at the broader education sector, an additional R28.1 billion has been allocated for the coming year. Basic Education emerges as the primary beneficiary, with funding for national schools climbing to R332.3 billion.
