Student debt has become a major concern affecting the whole post-school education system value chain. Everyone is affected, not just students and university administrations but also government revenue. Universities withhold certificates and academic records when students do not pay their debts. These same students are then caught in a vicious circle, as they are unable to apply for jobs without academic records and certificates, and without a job, they are unable to pay off their student debt.
The Portfolio Committee on Higher Education has heard that the total outstanding burden across the post-school education system now stands at R59 billion. The National Student Financial Aid Scheme (NSFAS) is responsible for nearly half of this total, with R29 billion coming from NSFAS funded students. Meanwhile, self-funded students contributed R26 billion and the rest was made up of irrecoverable debt of R12 billion.
These numbers emerged during a briefing from the Department of Higher Education and Training (DHET), Universities South Africa (USAF) and the South African Public Colleges Organisation (SAPCO) on student debt and the withholding of students' certificates across the post-school education and training system.
The DHET said concerted efforts are needed from all stakeholders in the post-school system as government continues to invest significantly in student funding through NSFAS.
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Committee Chairperson Mr Tebogo Letsie said: "The statistics show that student debt is continuing to rise, which suggests that the measures put in place are not working as intended. We all agree that NSFAS has shortcomings. However, the problem is that when a student leaves an institution without a certificate, their chances of finding a job and paying off that debt become even smaller, because they cannot prove that they have the qualifications needed for employment."
DHET indicated that 165 000 qualification certificates are currently being withheld because of outstanding student debt, describing the figure as alarmingly high. Meanwhile USAF said the number of certificates withheld by universities totals 188 209.
DHET said universities of technology show the highest debt ratios, while traditional universities still carry a substantial absolute debt balance. Furthermore, DHET said the statistics confirmed that student debt is not isolated to one institutional category but is a sector-wide financial issue.
An important driver of rising student debt is the increasing cost of student accommodation, which has become a major contributor to overall indebtedness across the sector. The shortage of affordable student housing, rising private accommodation costs, higher transport expenses and delays in NSFAS accommodation payments have all added to the financial strain facing students and institutions.
The committee noted that NSFAS-related debt stems from reconciliation challenges between NSFAS, accommodation fees that go beyond the NSFAS cap and tertiary institutions.
Committee member Ms Delmaine Christians said students have become the long-term victims of unresolved issues between tertiary institutions and NSFAS. It paints a worrying picture for the higher education system. It also raises the spectre of the many students sitting at home, unable to find meaningful work. At the same time, universities and TVET colleges are being slowly financially destabilised by the growing debt in the sector.
The committee observed that ongoing reconciliation problems between NSFAS and institutions continue to affect students negatively and is one of the factors contributing to student debt.
According to statistics provided by USAF, the Central Peninsula University of Technology (CPUT) has the highest student debt at approximately R4.2 billion, followed closely by the Durban University of Technology (DUT) at R4.1 billion and North West University at R3.8 billion. When it comes to the most withheld certificates, the Tshwane University of Technology (TUT) leads with 24 394, followed by DUT 23 155 and CPUT 16 196.
SAPCO reported that in the technical vocational education and training colleges sector, more than 20 950 certificates are currently withheld nationally, Sekhukhune TVET College alone accounts for 10 452 withheld certificates. Letaba TVET College 5 543 withheld certificates. SAPCO said some outstanding debts date back as far as 2007-2010.
Another committee member, Ms Yanga Govan, said the withholding of degrees, diplomas and certificates is not just about numbers. It is about young people who should be entering the world of work but are being held back because of the debt they owe. "Most of these young people have faced difficulties in accessing the post-school education system, and even when they are at universities and colleges, some continue to struggle because of their financial circumstances, only to face yet another challenge of being unable to find employment due to withheld qualifications."
Mr Letsie added that the issue of finding a comprehensive student funding model is extremely urgent. "There is no university that will survive for five years if NSFAS collapses. It is in the best interest of everybody in the system to make sure that NSFAS does not collapse."
The department must play a central role in finding mitigation measures by engaging with stakeholders in the sector. There must be working relations between USAF, universities and NSFAS and not let policy issues trickle down and preventing students from gaining meaningful employment
In 2021, the department asked USAF to investigate institutional practices relating to the withholding of certificates and academic transcripts and to develop a minimum set of recommendations and guidelines to promote a more systematic and coordinated sector-wide approach. The survey conducted by USAF confirmed that most universities already have measures in place to support students who have completed their qualifications but still owe fees.
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DHET Director General Dr Nkosinathi Sishi told the committee that in response to student debt concerns, it sought legal clarity on whether universities' withholding of certificates is constitutionally permissible. The legal opinion obtained acknowledged the prejudice and hardship students experienced. At the same time, it recognised that universities are autonomous institutions operating within contractual arrangements with students and that institutions have a legitimate obligation to recover monies owed to them.
"The legal advice concluded that the withholding of certificates, as part of debt recovery mechanisms, does not in itself deprive students of a constitutional right, provided that universities continue to make available proof of qualification completion and academic transcripts where necessary," said Dr Sishi.
Mr Letsie concluded that all stakeholders must play a role in ensuring that students graduate, receive their certificates, participate meaningfully in the economy, and are able to support their families and lift them out of poverty.
Jabulani Majozi
