NSFAS nonpayment leaves 300 Joburg students without shelter

More than 300 students from the Central Johannesburg TVET College (CJC) were locked out of their residences by their landlord, Urban Circle, after the National Student Financial Aid Scheme (NSFAS) failed to pay for their accommodation.

The case highlights discrepancies in funding between universities and colleges. 

Urban Circle, which owns several properties housing thousands of students in the greater Johannesburg area, said NSFAS had not paid rent on behalf of students residing at its properties for more than six months. A total 301 CJC students owed the company R6m in unpaid rentals.

The company said it had also racked up expenses for the students’ accommodation, water, electricity, Wi-Fi and transport since the beginning of the academic year. 

Urban Circle said all students had concluded lease agreements with different Urban Circle landlords, outlining rental payments and the rights of both parties.

NSFAS only facilitates rental payments and has no contractual relationship with Urban Circle. As such, any violations of lease terms falls on the student as the leaseholder, said Urban Circle’s legal representative.

“The students are not being chased out. Instead of the more drastic measure of commencing formal and irreversible ejectment proceedings against each of our students, which include seeking damages against the sureties who signed a lease on behalf of a student, we are merely temporarily suspending access to those students as a means to mitigate any further damages being suffered that would arise by further consumption of electricity and water at the premises absent any indication as to when payment will be forthcoming or at all.”

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Urban Circle allowed Business Day to see its exchanges with NSFAS concerning the outstanding rental payments. The communication started in May when the students’ debt stood at R4.4m for the period February to May. The landlord warned it might have to limit student access to certain services to limit the financial blow it was taking due to nonpayment.

In response, NSFAS promised to pay a lump sum to cover rentals for February to June.

However, Urban Circle was paid only R907,000, leaving it with a shortfall of R5.1m. When no further payment was received, it again  wrote to NSFAS and CJC, informing them that the financial burden of housing all CJC students was  commercially untenable in the absence of payment.

On Monday, Urban Circle reminded NSFAS of its unfulfilled undertaking and said it had no choice but to protect its commercial interest.

The fate of CJC’s students pales in comparison with that of their peers at Wits and the University of Johannesburg. Urban Circle said the two universities had taken proactive steps in guiding the interests of the students who are sponsored by NSFAS and landlords who take them in.

“As such, UJ and Wits, out of their own coffers, pay rental to the various landlord on behalf of its NSFAS students, with the intention that whatever amount is paid to the landlords will be equally recouped from NSFAS whenever NSFAS is able to eventually make payment,” the company said.

CJC had attempted to institute a similar arrangement but this failed after CJC erroneously paid rental amounts directly to its students, instead of to landlords.

“This money was never received by the landlords and for all intents and purposes this money has vanished,” Urban Circle said.

khumalok@businesslive.co.za