Current student protests taking place around the country at various institutions of higher learning are prominently centered around financial blocks/exclusions, due to historic debt owed by students enrolled at these universities.
The debt, and the financial exclusions created by the debt, is preventing students from successfully registering for the year, despite meeting the academic requirements.
The protests, which began during the week of 13 February 2023 (which was when most institutions reopened their doors for the new year), are reminiscent of the Fees Must Fall protests of 2015, which also centered around student debt and the increase in tuition fees, which became unaffordable for students and their families, as well as calls for increased government funding of universities.
Eight years later, student debt has risen and continues to rise to astronomical levels, and is holding students back as well as impacting South Africa's economy.
There are currently growing calls for historic debt to be scrapped completely.
"Historic debt in 2020 was audited by the Department of Higher Education and Training (DHET), and is sitting at R16.5 billion for institutions, and R9 billion of which was not considered to be recoverable," says Dr. Phethiwe Matutu, CEO of Universities South Africa.
Matutu added that the R9 billion of unrecoverable debt poses a threat to the stability of the Higher Education Sector, and that managing and controlling student debt is important so that it does not "balloon out of control".
Rising student debt is currently one of the most topical challenges faced by the country's Higher Education Sector, in part due to the fact that funding provided by the DHET through the National Student Financial Aid Scheme (NSFAS), 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).
"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," stated Minister of Higher Education, Blade Nzimande, last year.
A major contributing factor to the millions of Rands owed in student debt is the missing middle; those who are labelled as "too rich for NSFAS", but are unable to afford to pay their fees without any financial aid.
Student debt has been a continuing problem for South Africa’s economy and Higher Education Sector, as there is limited funding available that is provided by the DHET; there is simply not enough money to fund all students who are enrolled within tertiary institutions.
The Department of Higher Education has however said that they are consulting with stakeholders to find a solution to historic debt and a gap in funding. One possibility the Department is looking at is a loan scheme.
Answering a question for Parliament, the DHET has said:
The Department of Higher Education and Training has embarked on further consultations with the banking sector as well as the Banking Association of South Africa (BASA) to explore options for a credit guarantee model before an application for a credit guarantee can be submitted to National Treasury by the Minister of Higher Education, Science and Innovation.
Because of historic debt owed by students, this has created "blocks", essentially excluding students from registering online on their universities' web-portals for the academic year. Not being successfully registered until the debt is paid or cleared prevents students from continuing with their studies, or from graduating.
NSFAS covers the tertiary education costs of approved applicants, who are from disadvantaged backgrounds and are unable to fund their studies on their own. However, even though NSFAS covers tuition, accommodation, transport and registration fees (amongst other costs), the amount of money received is not always enough to completely pay for a student's higher education.
NSFAS provides bursaries without asking students to repay the money; yet those who are beneficiaries of NSFAS still accumulate debt as the limited funding from NSFAS is unable to keep up with rising inflation and the cost of living, therefore not covering all their financial needs.
For example, NSFAS and the DHET recently introduced a R45 000 cap of the student accommodation allowance, but students say that prices of accommodation have risen way past the stipulated threshold put in place by the bursary scheme; therefore, the allowance received for accommodation is not enough to cover the cost of rent, leaving students stranded.
Students will either have to pay the outstanding difference themselves or find other accommodation, which is a challenge on its own.
Some students may be owing universities money which can be covered by NSFAS, thus clearing their financial blocks, but the scheme is notoriously delayed with the disbursing of funds to students, which is currently the case.
Since NSFAS covers registration fees as well, students are left in limbo as they wait for their funds to kick in, even though the academic year has already begun.
The delay in NSFAS payments is a predicament that is out of the control of students, but they're the ones left hanging.
Protest action first erupted at the University of Cape Town (UCT) in response to financial exclusions, issues with accommodation, registering for the academic year and struggles with NSFAS, now spreading to other universities such as the University of the Western Cape (UWC), Wits University, University of KwaZulu-Natal (UKZN), North West University (NWU), and the University of Johannesburg (UJ), for the same reasons.
