Universities forced to navigate tricky balance between cash flow and student access to education

Recently, the University of the Free State (UFS) announced plans to discontinue provisional registration from 2026, meaning students with outstanding fees or without confirmed funding will no longer be permitted to register. This led to widespread protests, resulting in eight arrests and the closure of the Qwaqwa campus, which was later reopened after the university withdrew its plans.

Read more: University of Free State students arrested as backlash over registration policy brings classes to a standstill

Similarly, students from the Cape Peninsula University of Technology also held a protest at the main campus in Bellville. They closed all learning activities after the university revealed plans to introduce an application fee and make students pay upfront for registration. The university’s management later withdrew this. 

Despite the proposals being withdrawn, the changes would have affected students who face financial difficulties. 

Daily Maverick spoke to various universities to understand what led them to make such proposals.

UFS’s senior director of communication and marketing, Lacea Loader, told Daily Maverick that UFS had reviewed the provisional registration process and found that it was no longer achieving its original intended purpose to allow academically deserving but financially constrained students to proceed with their studies while making plans to settle outstanding debt.

“This decision to phase out provisional registration, approved by the UFS Council on 26 September 2025, addresses the financial pressures facing both students and the institution while carrying forward the university’s values of care and social justice in a format that is more beneficial to students.

“The primary aim of this approach is not simply to manage debt, even as student debt has climbed to nearly R1-billion over the past five years. It is about creating a proactive support system that gives students certainty about their funding and registration status well before the academic year begins,” said Loader.

The university later decided that by 1 January 2028, all students will be fully registered, and provisional registration will officially come to an end. 

“The institutional Student Representative Council and the campus Student Representative Council agreed to a phased implementation of the council’s decision, i.e. to phase out provisional registration over two years (2026-2027), allowing concessions for students with outstanding debt, and ensuring that all registered students have access to their official academic records,” said Loader. 

Daily Maverick also spoke to Cape Peninsula University of Technology’s (CPUT’s) spokesperson Lauren Kansley, who said the university was facing a financial crisis and that students owed more than R1-billion in outstanding debt. 

“We face mounting pressure, and it’s increasing every single year. CPUT is more than a billion rand in debt. We cannot continue on a trajectory where the debt mounts and we have no interventions at all. That’s all the proposal said, which has now been removed… But those are measures that have always been in place,” said Kansley.

Read more: We need to rethink how to fund education in the age of unemployment and student debt

She added that the upfront fee was R3,500, and that first-year students receiving National Student Financial Aid Scheme (NSFAS) funding would not have had to pay it. 

Both CPUT and USF said they faced financial difficulties at the start of each year. 

“The UFS continues to engage with the National Student Financial Aid Scheme and the Department of Higher Education and Training on broader sector challenges. Delayed fee payments create significant cash flow pressure, particularly as universities only receive annual government subsidies in April,” said Loader.

Meanwhile, Kansley said: “At the beginning of the year, where one is just waiting for those block grants to come in from the Department of Higher Education and Training, who are the ones who establish the fee increases as well… When we have spiralling debt like that, obviously, we need to maintain a certain level of the infrastructure that we have in place. We’ve also needed to replace a lot of infrastructure because of years of damage,” said Lauren.

Read more: Graduates welcome EFF proposal of bill aimed at settling student university debt

Importance of application fees and NSFAS issues

Few universities in South Africa charge an application fee. According to some universities, this mechanism helps with administration at the start of the year. 

Daily Maverick spoke to the University of Cape Town’s (UCT) Elijah Moholola, who said that UCT currently faced a student debt burden of R1.3-billion, following a sharp increase from R593-million to R836-million in the 2024 financial year.

“The application fee is nominal and assists in covering the administrative costs associated with processing the large volume of applications received annually,” Moholola added. “The National Student Financial Aid Scheme accommodation cap has had a significant impact on affected students as well as the university’s cash flow and income. The university is engaging in risk mitigation measures for dealing with the shortfall.”

Meanwhile, the University of Johannesburg’s (UJ) spokesperson, Herman Esterhuizen, said that UJ was one of the first universities in South Africa to make online applications free. However, he said that: “Although applications are free, UJ maintains rigorous financial control during registration through structured upfront payments and robust debt management systems. This ensures financial sustainability while keeping higher education accessible and equitable.”

For self-funded students with no historic debt, UJ required a minimum payment of R5,560.00 (2025), and residence students paid an additional R3,710.00 (2025). International students were required to pay at least 40% of their annual tuition fee before academic registration.

“This above minimum payment required covers the ICT levy, registration fee, and a portion of semester tuition. The payment structure is designed to ensure stability in UJ’s cash flow, particularly at the start of the academic year when government subsidies from the Department of Higher Education and Training are only released in April. This supports operational sustainability but also helps manage outstanding student debt,” said Esterhuizen.

As of September 2025, approximately R1.1-billion was owed by registered students and those no longer at the institution.

“The National Student Financial Aid Scheme accommodation cap remains a persistent challenge in high-cost urban areas like Johannesburg. While it limits flexibility and places financial pressure on both students and institutions operating in metropolitan centres, UJ’s agreements with private accommodation providers ensure the cap is not exceeded,” said Esterhuizen.

Meanwhile, the University of Western Cape’s (UWC) spokesperson, Gasant Abarder, said they had waived application fees many years ago. The decision was taken on the basis that the application fee waiver did not create financial exclusion for prospective students.

He said that students with funding required a letter of commitment from their sponsor/donor, which would enable registration without the upfront payment amount. 

However, “NSFAS students who were confirmed for funding by NSFAS are also not required to pay the upfront minimum payment amount. Students who do not have any tuition fees and student accommodation sponsorship or support will be required to pay the full upfront amount at registration, R4,290 and R4,840 for students with student accommodation. These upfront payments have not increased since 2014,” said Abarder. 

Daily Maverick sent questions to National Student Financial Aid Scheme spokesperson, Ishmael Mnisi, regarding what specific measures the scheme was implementing to ensure the first upfront payment to institutions was consistently transferred in January at the start of the academic year, or was this practically impossible? And whether the scheme was undertaking a review to adjust the cap based on the geographical location, actual market rates and municipal classification of the university to avoid this debt accumulation?

No response had been received by the time of publication.

Department of Higher Education and Training spokesperson Matshepo Seedat told Daily Maverick that these fee increases were taken by university councils, as they were accountable and responsible for the financial wellbeing of the institutions.

Read more: Students out in the cold as NSFAS faces R10.6bn budget shortfall for universities

“What we must recognise is that these changes are responsive to the existential crisis of a burgeoning aggregated student debt situation, which is now estimated to be in the region of R24-billion. These decisions on the part of the councils are symptomatic of that challenge,” said Seedat.

She said that currently, none of these universities were at risk of bankruptcy, even though student debt significantly and negatively affected their financial health (including academic, infrastructure, and administrative stability).

Seedat said the Department of Higher Education and Training and National Student Financial Aid Scheme were working on measures to assist universities. 

“The National Student Financial Aid Scheme has committed to making funding decisions by 15 December 2025. This should enable a smooth registration period in 2026 by institutions… The scheme has released the student accommodation protocol for public comment, which is aimed at bringing a guiding framework to the student accommodation sector for the scheme’s beneficiaries,” said Seedat. DM