In January, during his readiness address Higher Education Minister Blade Nzimande emphasised that the extent of student debt posed a serious threat to the future sustainability of the country's higher education institutions.
Nzimande said that the country's current cost of debt annually amounted to about R1.5 billion.
With growing calls for historic student debt to be scrapped and with the ongoing student protests at institutions across the country adding further pressure, many have highlighted the need and urgence as it continues to impact the lives of thousands of individuals.
The need to scrap historic student debt has further been emphasized, despite the various streams of government funding provided by the Department of Higher Education and Training (DHET) as the numbers suggest that these funding models are not enough to fund all students who are enrolled in tertiary institutions.
Speaking on the student debt crisis, Universities South Africa CEO, Dr Phethiwe Matutu elaborated that historic debt in 2020 was audited by the DHET and therefore estimated to now be sitting at around R16.5 billion.
Matutu explained that out of the R16.5 billion owing to tertiary institutions, approximately R9 billion was not considered to be recoverable.
“It poses an issue of lack of sustainability of the DHET. So, it is important that one manages it and controls it so that it doesn’t balloon out of control,” she adds.
Furthermore, Matutu said that one of the major contributors to the mounting student debt is the issue of the missing middle students.
The “missing middle” refers to students who come from working-class households that do not qualify for government funding while at the same time, cannot afford higher education.
As far as government intervention to address the issue of student debt, minister Nzimande revealed that government was set on wrapping up consultations on a new comprehensive student funding model that aims to assist missing middle students as well.
We have got a report now of the ministerial task team and we're just concluding consultations on that, with the aim of going back to Cabinet to hopefully adopt a comprehensive student funding model on that with the aim of going back to Cabinet by the end of the current financial year or not very late in the new financial year.
Nzimande said that within the new policy framework, his department will avail loans and bursaries and direct these efforts toward missing middle students within scarce skills categories.
