This is primarily due to their inability to pay their student loan, particularly in instances where employment is not guaranteed for the borrower.
The issue is most common among students who do not have access to funding assistance from organisations such as the National Student Financial Aid Scheme (NSFAS) and resort to approaching financial institutions for a student loan.
An all too familiar consequence of this according to Student Debt Specialist, Paulvia Shiburi is that, on several occasions, impacted parents end up seeking help from debt counsellors due to their inability to repay student loans.
Even as debt counsellors, we have seen that multiple parents come and apply for debt counselling because of the student loans that they've taken from several Banks. And not only limited to Banks as even the grants that have been supported by the government you know that are initiated by the government for students.
She adds that the most enabling factor in students defaulting on their loan is unemployment, particularly with those indebted to Banks as a result of receiving a student loan. This is part why the loan repayment process is often initiated while the student is still enrolled in their chosen tertiary institution.
For parents who are considering independently supporting their through student loans, Shiburi says its important to note that signing surety for that means that they are legally liable for paying it back, even if the person they are supporting is not able. Thus it is just as important for them to weigh their options wisely.
During his 2023 NSFAS state of readiness speech last month, Higher Education Minister Blade Nzimande pointed out that the extent of student debt poses a serious threat to the future sustainability of the country's higher education institutions. He confirmed that the current student debt owed to tertiary institutions stood at around R16.5 billion
Addressing the issue of student debt, the minister said that the government was set on wrapping up consultations on the comprehensive student funding model.