Government Wants To Establish Missing Middle Loan Scheme


Thousands of students will not be able to obtain qualifications due to the high cost of tertiary education. The higher education department is investigating several options to ensure students who do not qualify for National Student Financial Aid Scheme bursaries can attend tertiary education institutions.




The National Student Financial Aid Scheme (Nsfas) ensures that thousands of students from poor and working-class backgrounds can obtain tertiary education qualifications without having to face financial barriers. Nsfas confirmed funding for 691,432 students for the 2022 academic year.

Despite the thousands of students being assisted by Nsfas, there is a group of students in South Africa who require funding but do not qualify for Nsfas bursaries. These students are known as the missing middle.

Missing middle students come from households with a combined income of above R350,000 which disqualifies them from receiving a Nsfas bursary. However, their household income cannot cover the costs associated with tertiary education.

The Department of Higher Education and Training (DHET) is looking at various ways to assist students who fall within the missing middle. This comes as the department wants to create a sustainable student financial aid model.

Dr Thandi Lewin, DHET Acting Deputy Director-General: Universities, Education and Training said that as part of the long-term development of a new, comprehensive student funding policy, the government should explore the establishment of a loan scheme to support “missing middle” students in accessing higher education and training.

Due to the time and planning it would take for this loan scheme to be implemented, the department has been advised to investigate ways to assist missing middle students in the short term.

A Ministerial Task Team advised the DHET to explore the possibility of a credit guarantee model for loans for missing middle students from 2023 onwards.

The Department is exploring the options for such a model with commercial banks and other financial service providers, before an application for a credit guarantee can be submitted to the National Treasury by the Minister.

The DHET revealed that they were in the process of engaging the support of a financial analyst, with actuarial experience, to support the Department through the negotiations process with banks and financial service providers from November to February 2022.





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