Guiding consumers since 2009

South African student debt crisis

By Staff Writer

According to the Sunday Times, 20 September edition, the ‘debt mountain’ of monies owed to just 12  of the 26 South African Universities, by students, is standing at R3,9 billion, and growing.

Student debt, however, is an issue that affects all universities, some more than others. One such university, Cape Peninsula University of Technology (CPUT), the largest in the Western Cape with around 33 000 students, shoulders a large portion of that. With student debt currently standing at around R108 212 626, according to CPUT media liaison, Lauren Kansley, they, like all other higher education institutions, are suffering.

On the heels of protests taking place at CPUT earlier this year because of funding related issues, the institution has been forced to look at the financial standing of their student body and plan a way forward. Especially in light of applications for next year having taken place recently.

“No student studies for free at CPUT and our student body is well aware of that. With that said, provisions for academically deserving students is always sought. One of these provisions sees the Student Affairs department themselves donate a portion of their budget towards academically deserving students, “said vice-chancellor Dr Prins Nevhutalu.

NSFAS

Despite having student funding in place like the National Student Financial Aid Scheme (NSFAS), these bursaries are only given to the lower income group who meet a certain criteria. An example of such a criteria for NSFAS as administered by University of Johannesburg (UJ) http://www.uj.ac.za/EN/StudyatUJ/StudentFinance/NationalFinancialAidScheme/Documents/NSFAS%20Rules.pdf) is as follows:

- Students who claim to receive no financial support from their families must produce proof of this before their NSFAS applications will be considered.

- Students must submit death certificates if one or both of their parents are deceased.

- Students must submit proof of unemployment in the form of an affidavit if one or both of their parents are unemployed.
 - If parents are unemployed, students must submit proof of what the family is living on.

- If students’ parents were never married, students must submit an affidavit from the parent with whom they are living.

- If students’ parents are self-employed in the informal sector as hawkers, for example, or if they work from home, the parents must submit an affidavit indicatingthe amount that they earn.

- Only students who are over 23 years old and living away from home permanently will be regarded as self-supporting.

- Loans are only available for the first tertiary qualification, and even so assistance is only given for up to five years.

- Senior students must have passed at least 60% of the registered subjects or modules in the previous year.

The challenges

“Some of the challenges we face is that many of our students, while meeting the criterion for NSFAS, do not receive funding. This year around 4887 students received NSFAS funding but 1 000 did not despite meeting the criteria,” said Kansley.

These students are then left to fall through the cracks and are put under immense pressure as they cannot solely focus on their studies. Samantha van Zyl from Student Village noted: “Poorer students are then left to also worry about meeting their basic needs while trying to get an education and to focus on studies. There is a culture of not paying debt back, as well as the issue of students not being successful in passing their studies. When study loans aren’t honoured, it places pressure on families as well.

“Sometimes family members will make a study loan on behalf of the student and depend on their success for them to be able to perhaps pay back the money or provide for the family. They make a sacrifice now for future benefit. Student debt gets them an education but delays their gratification when they need to pay back the money. So we are left with the issue of what young people expect versus what Government is able to offer, herein lies the disconnect,” said Van Zyl.

Another difficulty is the issue of company requirements in terms of bursaries provided. According to van Zyl, companies are governed by factors like BEE, demographic and skillset. So certain fields of study are saturated with bursary opportunities, while others suffer.

Outstanding fees for 2015

University Amount owing in student debt
Tshwane University of Technology R 866.1 million; of which R350 million will be settled by NSFAS
University of Johannesburg R635 million
University of Witwatersrand R447 million
North West University R359 million
University of Limpopo R304.9 million
Durban University Technology R296 million
University of Stellenbosch R230 million
University of Western Cape R170 million
Nelson Mandela Metropolitan University R152 million
Cape Peninsula University of Technology R108 million
Rhodes University R64 million
Source: The Sunday Times, 20 September edition

Advice for students needing funding

  • Students can go to a bank, private funder or find part-time or fulltime employment
 
  • There are also financial aid offices on campuses for the use of students
 
 
  • Students can also go to their accounts departments to ask for assistance and payment arrangements. This will at least assist them in better decision making and financial management.
 
  • There are also various independent organizations like Student Village that offer bursary management programmes to assist businesses to manage their bursars.
 
 The Sunday Times went further in saying that following a report by NSFAS handed to the Minister of Higher Education, Blade Ndzimande, a request for assistance from the Public Investment Corporation (PIC) and commercial banks is on the table.

“Expectations should be managed better and better communication is needed as to what is possible in terms of offering funding. Businesses that want to partake in giving bursaries also need assistance in reaching the youth better and the right youth especially. This will motivate them to give more as it will prove effective,” said Van Zyl.
 
 
 
 
 
 
 
 

Recent Articles

Featured The bank took money from my account – is this allowed?

You’ve just deposited money into your account and suddenly you see a notification from your bank. Money has been deducted from your account to pay the outstanding debt that you have with the bank. Is this allowed?

How much does it cost to draft a will?

Having a Will allows you to determine who inherits your property when you die. If you die intestate, the government will determine how to distribute your assets. Many people die intestate because they don’t know how to draft a will or are intimidated by the costs of drafting one.

Is your home correctly priced for the current market?

The property market is typically in either one of two phases, a buyers’ market or a sellers’ market. According to real estate experts, we are currently in a buyer’s market. For this reason, it is important as a seller to correctly price your house to ensure interested buyers and a valuable sale in the end.

Fuel rewards programme – how to fill up on petrol and points

South Africa’s volatile economy has often meant that factors like the fuel price bear the brunt. This year alone the country’s fuel price has fluctuated by between R1.50 to almost R3, which has put increasing pressure on motorists. That said, many of the bigger South African brands have provided some relief by way of fuel rewards programmes.

Deals

Wax On Wax Off Wednesdays at Rouge Day Spa

Price: From R50
When: Wednesdays
Where: Cape Town

Aarya Restaurant Christmas Lunch Special

Price: R425
When: 25 December 2019
Where: Johannesburg

Da Vinci’s Tantalising Tuesday Pizza Special

Price: Available on request
When: Tuesdays
Where: Cape Town