The National Student Financial Aid Scheme (NSFAS) is a South African government initiative that provides financial assistance to students from poor and working-class families to access higher education. While the current NSFAS model for university and TVET college students is a bursary that does not require repayment (as long as students meet certain conditions), there are still situations where recipients have to pay back NSFAS. This is especially true for students who received funding before 2018, when NSFAS operated primarily as a loan scheme.
What Happens If You Don’t Pay Back NSFAS: Consequences and Solutions
If you’re unsure about whether you need to pay back NSFAS or what the consequences of non-repayment are, here’s a comprehensive guide to help you understand the implications and available solutions.
Who Needs to Repay NSFAS?
- Students funded before 2018: NSFAS operated as a loan system for university students before the introduction of the bursary model in 2018. These students are required to repay the funds once they start earning above a certain income threshold.
- Students who breach bursary conditions: Even under the bursary system, failure to meet academic progression requirements, changing to an ineligible course, or dropping out without proper notification can result in the bursary being converted into a loan.
- Students receiving NSFAS-administered loans: Some postgraduate and special programme students may receive loan funding through NSFAS, which must be repaid.
Consequences of Not Paying Back NSFAS
- Blacklisting and Credit Bureau Reporting
NSFAS can report defaulting students to credit bureaus. This negatively affects your credit score, which can prevent you from:- Applying for loans (home, car, personal)
- Getting certain jobs that require credit checks
- Renting property or signing contracts requiring credit clearance
- Legal Action
NSFAS may take legal steps to recover the funds. This could include:- Issuing letters of demand
- Taking the matter to court
- Garnishing wages (deducting money directly from your salary)
- Interest and Penalties
While NSFAS loans have relatively low-interest rates, ignoring your repayments can lead to interest accumulation over time. The longer the debt is unpaid, the more it grows, making it even harder to settle. - Limited Access to Future Financial Aid
If you default on NSFAS repayments, you might be ineligible for further financial assistance from NSFAS or other government bursary and loan schemes in the future. - Stress and Reputational Damage
Besides financial implications, the stress of dealing with debt collectors and the social stigma of being listed as a defaulter can affect your mental health and professional reputation.
Related: NSFAS Loan Repayment: How and When to Pay Back Your Student Loan
Solutions: What You Can Do
- Check Your NSFAS Loan Status
Visit the NSFAS website or call their contact centre to verify if your funding was a loan or a bursary. Also, check if you owe anything and how much. - Start Repaying Once You Qualify
NSFAS loans are income-contingent. Repayments are only required once you start earning R30,000 or more per year (or R2,500 per month). Payments are usually 3% of your annual income and increase as you earn more. - Make Arrangements With NSFAS
If you’re struggling financially but want to avoid legal consequences, contact NSFAS to make a repayment arrangement. They may offer flexible payment options or even temporary payment holidays in some cases. - Use Payroll Deduction
If you are employed, ask your HR department to deduct NSFAS payments directly from your salary. This makes it easier to stay on track and avoid missing payments. - Update Your Contact Details
Always keep your contact details up to date with NSFAS so you don’t miss important notices or payment reminders. - Consider Voluntary Repayments
Even if you are below the income threshold, making small voluntary payments can reduce your debt and show good faith, which may be useful if you ever want to apply for further financial aid.
Ignoring NSFAS debt has serious consequences — from credit damage to legal trouble. However, NSFAS is designed to be affordable and fair, and there are practical steps you can take to stay in good standing. If you’re unsure of your status or struggling to make repayments, it’s better to reach out proactively than to wait for enforcement actions. Managing your NSFAS responsibilities wisely is not only a financial obligation but a way to keep future doors open for career and educational opportunities.
