With the current surge in inflation and cost of living increases, the current student debt crisis faced in South Africa Is causing significant concern.
According to Universities South Africa (USAf), student debt has climbed from R11.3 billion to R16.5 billion between 2018 and 2020.
Although there is no single policy or initiative that will solve the student debt problem because there are various root causes that have contributed to the current crisis, experts have expressed that government needs to tackle the crisis to avoid further increases.
South African Union of Students (SAUS) spokesperson, Asive Dlanjwa says that government needs to underwrite the writing off of student debt because the majority of students that are having financial challenges are students that entered the sector before 2018, and before NSFSAS implemented the R350 000 threshold.
Dlanjwa stresses that student debt has led to a high dropout rate because students are left with no other option but to find employment whilst maintaining their students in order for them to pay their study fees.
This has also prevented young people from contributing back into the economy, so it makes economic sense that student debt be written off by the government, he adds.
Universities and other higher education institutions have expressed that the crisis has detrimental impacts on the academic programmes of these institutions and in terms of institution cashflow.
Usaf's Dr Linda Meyer says that government needs to find the money and reprioritize to that they are able to pay off the student debt.
“The facts really speak for themselves, 120 000 of our students are unable to graduate from universities because of this historic debt that they are carrying.”
Meyer says that many universities struggle to make budgets at the end of year and subsidies and grants that institutions receive from government do not make up for the student debt losses.
"Tuition fees that is paid by students makes up 33% of university fees, government grants make up 44% and third stream revenue makes up 23% of university operation budgets."
She adds that student debt is a systemic challenge that needs to be addressed and government must provide policy certainty so that there is a different scheme that is available for students who are not eligible for government funding like Nsfas.
