Rising student Debt is currently one of the most topical challenges faced by the country's higher education sector. This is because funding provided by the Department of Higher Education is not enough to fund all students who are enrolled in tertiary institutions. according to a study conducted by the South African Institute of Fiscal Studies (Safar).
Total national student debt stood at R14 billion by the end of 2019, and was expected to increase to its current amount of R16.5 billion. This has prompted experts in the sector to examine the total effects of all of this on the South African economy.
Additionally, the Minister of Higher Education, Blade Nzimande revealed in February earlier this year, that tertiary students owe the National Student Financial Aid Scheme (NSFAS) R5.3 billion. Nzimande also stated that student debt was rising in the university sector.
A survey conducted by the department in 2021 showed that an estimated 56.2% of students with debt owe less than R10 000. About 32.9% [of them] owe between R10 000 and R50 000, and 10.9% owe more than R50 000. The survey also showed that NSFAS students owe R5.3 billion.
Nzimande noted that NSFAS had received 906 429 applications for the 2022 academic year and that the government had contributed R1.7 billion to the bursary scheme.
The worsening outlook of the issue prompted criticism of the Higher Education Department from experts in the sector the following year. They expressed doubt about the department’s ability to sustain its current student funding model, holding the view that the state should allow for more private-sector intervention.
This view was further emphasized in an opinion piece authored by Wits University’s associate Professor of the School of Governance, William Gumede titled “The problem of funding SA students can be solved” where he argued that the student funding policy should be more transparent rather than its current heavily politicized form.
“Student funding policy should be based on honesty, affordability, and pragmatism. Up to now, the student funding policy, like most ANC government policies has either been based on ideology, or wishful thinking and not on financial realities," he argued
The minister claimed that the misappropriation of funds makes it difficult to argue that the state lacks the financial resources to support higher education.
However, the South African Union of Students (SAUS) Secretary General, Lukhanyo Daweti holds a different view from that of the minister. While discussing the issue with Careers Portal, he stated that this is a flawed assessment as it overlooks the actual cause of rising student debt.
"We must not solely shift the blame for student debt on the Higher Education Department because student debt is caused by our students who happen to perform poorly. The ripple effect of not performing well is that you end up no longer being funded" he explains
As a student union, they have been calling on the DHET to exercise leniency in its funding policy, particularly towards students who come from impoverished backgrounds.
The Union general secretary further states that an additional contributor to the student debt issue is students who are unable to access state-funded financial assistance due to being categorised as forming part of the missing middle.
"We've been in communication with the Minister to say one of the things that we need to eradicate student debt is to bring the private sector on board because most students are already qualified. But their qualifications are held up in higher learning institutions due to outstanding debt" He adds
Collaborative effort between the public as well as the private sector is what the union believes would result in an affordable and tangible solution to assisting the above-mentioned cohort of students to receive their qualifications.
Since students who are in the missing middle are considered major contributors to the rising student debt, The SAUS holds the view that a practical solution would be for the government to avail student loans to this cohort but at a low negotiated rate.
To date, according to the Higher Education and Training Dept Budget Vote 2022/23, the DHET’s national budget for the 2022/23 financial year has been confirmed to be R130.1 billion, resulting in an annual average increase of 7.0%.
