According to USAf, the total amount owed to universities from 2023 was R21,7 billion. R9.3 billion of this student debt is considered recoverable while R12.4 billion is considered not to be fully recoverable.
They explain that the student debt has a significant impact on university budgets.
CEO Dr Phethiwe Matutu said when universities budget at the beginning of the year, they expect to receive full payment of fees, alongside their government subsidy. However, when expected funds do not materialise, institutions may begin to spend money they haven’t received which leads to the accumulating of debt.
When these funds do not get there, depending on the university, they may start to budget and also spend the funds that they do not have. So year on year it's possible that they may accumulate debt and once that debt becomes irrecoverable…at some stage it's possible to go bankrupt
Matutu says that all universities in South Africa are affected by student debt, but the impact is more severe at institutions with larger student populations. It's also more prevalent at institutions where students may come from lower socioeconomic backgrounds.
Universities which are most affected are those who constitute a huge number of students and also students who are from low social economic backgrounds.
She explained that a significant portion of the debt comes from missing-middle students. This refers to students whose household income is above the R350,000 threshold and therefore do not qualify for government bursaries.
This debt is largely ascribed to the so-called missing-middle students, whose household income is above R350,000.
The National Student Financial Aid Scheme (NSFAS) introduced a loan option for missing-middle students in 2024. During the application window for the 2025 academic year, NSFAS received 17,517 loan applications.
Despite these figures, Matutu expressed concern that the number of applications is still relatively low compared to the actual need for financial support among missing-middle students.
The number seems to be quite small of those who applied. They're talking about 19,000 applications and I would imagine that they are likely to be more than that.
NSFAS indicated that 16,013 loan applicants in 2025 had a household income below R350,000 and therefore qualified for NSFAS bursaries.
Despite this Matutu hopes that awareness and uptake of the NSFAS loan option will increase as more students become informed about the opportunity in the coming years.
