Walter Sisulu University student Sibongile Mani will start her career by paying back a student "loan" of R818 000.
It was what she allegedly spent of the R14.1m erroneously deposited into her account, spokesperson Yonela Tukwayo said on Thursday.
"She is aware that she will have to pay the money," said Tukwayo, adding that the university spoke to Mani.
"She knows that [National Student Financial Aid Scheme] funds are loans, they are not gifts. She will have to pay it back. She will unfortunately kick off her working career with a massive debt that she will have to pay off," said Tukwayo.
Mani made headlines when she allegedly went on a spending spree after the equivalent of $1m was paid into her IntelliCard account in June, which is run by the company Intellimali.
She was supposed to have received R1 400 which is the limit that can be spent at certain grocers and book shops.
Instead, she allegedly went on a spending spree and the error was only picked up in August.
The balance of the money has been retrieved, but now she is liable for the outstanding amount.
Tukwayo said a massive forensic investigation is underway to establish how she was able to use the IntelliCard at shops not part of the IntelliCard network.
The card was apparently used at shops that sold the luxury brand clothing.
She will also face legal action, in the form of a civil or criminal case, but the finer points of this are still being ironed out.
Comment from Mani was not immediately available and the deputy president of the Students Representative Council, Malungisa Toli, said she was in bad shape emotionally.
Toli is from the Pan Africanist Students Movement of Azania (Pasma), where Mani is also an office bearer.
He said they were trying to support her as best they could, and would issue a statement later on Thursday to express their view on developments.
He could not confirm that a new Facebook page set up in Mani's name was authentic but some of the posts on that page indicated that the woman was afraid about how the money would be paid back.
The money involved in the controversy is sent to the university from NSFAS as part of the R15bn that the department of higher education spends on assisting financially strapped students.
Tukwayo explained that the university keeps a portion and that the monthly allowances for the students is administered by IntelliMali.
The money is paid into an IntelliCard account which comes with a debit card.
The system is similar to that used by the SA Social Services Agency to pay grants.
Tukwayo said Mani had not been suspended and was allowed to attend classes.
IntelliMali CEO Michael Ansell said the student allegedly "misappropriated" the money when it was deposited in her account.
He claimed that the amount had been checked before it was deposited, and the intended amount of R1 400 was correct.
His company is also investigating where the extra zeroes came from.
NSFAS has distanced itself from the controversy, saying it is between the university, the student and IntelliMali.