South Africa does not need more students. It needs more people with careers.
The country’s official unemployment rate is 33.6%. Among 15 to 24-year-olds, it is an obscene 62.8%. For those aged 25 to 34, it is 41.8%. Around 3.8 million young South Africans between 15 and 24 are not working, studying or training at all. In a country facing this kind of catastrophe, every rand spent on post-school education should be judged by a simple question: does this help someone build a productive and economically independent life?
Yet South Africa spends tens of billions of rands every year through the National Student Financial Aid Scheme (NSFAS) without ever questioning if that system is helping enrich young South Africans.
NSFAS is an administrative disaster. In 2025, it had a budget of roughly R48.7 billion and supported around 811,000 students. Its 2024/25 financial statements received a disclaimer audit opinion. Auditor-General data analysis found hundreds of beneficiaries recorded as deceased who continued receiving funding, more than 14,000 recipients whose household incomes exceeded the eligibility threshold, and thousands of questionable funding cases. There were also 7,805 outstanding appeals, 98.8% of which the Higher Education Minister attributed to system failures. NSFAS was placed under administration in May 2026.
But even if NSFAS worked perfectly tomorrow, it would still be solving the wrong problem.
NSFAS is principally designed to determine whether someone qualifies for funding to study. It asks about financial circumstances, eligibility and academic admission.
What it does not seriously ask is what the applicant intends to do with the qualification afterwards. What career are they building? Is there demand for the skill? What are their likely earning prospects? Could the same person achieve a better outcome through an apprenticeship, professional certification or vocational programme costing a fraction of the price?
NSFAS asks whether an applicant is poor enough to receive the money. It does not seriously ask whether spending the money in the proposed way is likely to make that applicant less poor.
This does not mean degrees are worthless; quite the opposite. Graduate unemployment was 12.4% in the second quarter of 2026, dramatically below the national unemployment rate. University can be an excellent investment. But a degree being valuable in general does not mean every degree, for every student, at every cost, is a wise investment.
The mismatch is already visible. Department of Higher Education and Training research found that around 23% of South African workers were overqualified for their jobs in 2022, while 30.3% worked in occupations unrelated to their field of study. We have created a culture in which obtaining the credential can become the objective itself, rather than a means towards building a career.
That is backwards.
NSFAS should be abolished and replaced with a Career Planning Fund.
The principle is simple: funding follows the career plan, rather than forcing the career plan to follow the funding institution.
A young South African applying for support should explain what they intend to do. Someone who wants to become a doctor can make the case for a medical degree. Someone who wants to become an accountant can pursue the appropriate qualification. Someone else may want to become an electrician and require an apprenticeship, training and tools. Another may need a welding certification. Another may benefit from an accredited coding programme and industry certifications. Someone with a credible business idea may need training, equipment and limited startup assistance.
None of these ambitions is inherently superior to another.
South Africa has spent far too long treating university as the respectable default while vocational careers are treated as consolation prizes. Someone who excels at electrical work, plumbing, mechanics, construction, sales or running a business is not a failed academic. They are someone with a different set of productive talents. In an economy desperate for skills and jobs, those talents should be cultivated rather than pushed into an academic mould.
NSFAS does already fund public TVET colleges, but the broader system remains fragmented and institution centric. Apprenticeships, learnerships and workplace training sit elsewhere in the state bureaucracy. Private colleges are also excluded, despite providing a very important educational service.
What matters should not be which bureaucratic box a young person fits into. What matters is whether there is a credible route from funding to productive work.
Under a Career Planning Fund, applicants would submit a straightforward plan identifying the career or income-producing activity they intend to pursue, the training or qualification required, the cost, evidence that there is realistic demand, and the milestones required to get there. Funding could cover degrees, TVET programmes, apprenticeships, professional certifications, private vocational training, workplace learning and necessary equipment. It could even provide grants for small businesses under appropriate circumstances.
Money could even be released incrementally as milestones are reached.
This must not become another central-planning exercise where bureaucrats decide that South Africa needs exactly 5,000 welders, 3,000 programmers and 700 accountants. Government is terrible at predicting what an economy will need. Applicants should make their own case using market evidence: vacancies, salaries, employer demand, customers, industry certifications and other credible signals.
Universities, colleges, private training providers, employers and apprenticeship programmes would then have to compete for funded applicants. That is healthier than guaranteeing money simply because someone has entered an approved institution.
Of course, an 18-year-old from a poor household cannot be expected to produce an investment-banking prospectus. The application process should be simple, and career-planning assistance should be freely available. The purpose is not to reward whoever writes the fanciest proposal. It is to force both applicant and funder to think about the destination before spending scarce taxpayer money on the journey.
Education is valuable because it expands what people can do with their lives. It is a means towards knowledge, opportunity, independence and human flourishing. Government policy should remember that distinction.
South Africa does not need a programme dedicated to producing more students. It needs a system dedicated to helping young people become productive adults.
Nicholas Woode-Smith is the Managing Editor of the Rational Standard and a senior associate of the Free Market Foundation. He writes in his personal capacity.