The South African tendency to overspend is keeping many children out of school. And the same weakness deprives many who make it into the classroom of essentials such as uniforms and books.
Desperate to provide for their children, parents are flocking to loansharks — and digging themselves more deeply into debt.
Because of their parents’ financial circumstances, many children have simply not been registered at school, while others don’t have the necessary fees, books or uniforms required. Thousands will miss out on the first few weeks of school while their parents try to raise the necessary funds.
Letsatsing Science High School in Mmabatho feels the effect of such financial problems every January, principal Seliki Tlhabane told the Mail & Guardian.
“I think parents spend money on their children’s other needs, like clothes and food, but they are not distributing the money well,” he said. Parents give a variety of reasons for not being able to pay fees — from using the money for family emergencies, such as funerals, to paying the medical aid shortfalls after hospitalisation.
School fees at Letsatsing are R600 a year. “If this money is not paid in January we experience a problem because the first three months are the ones when we spend money. We buy stationery and equipment for our school,” said Tlhabane. “Paying school fees in October and November does not help because the school would have suffered financially for the whole year.”
The human resources (HR) manager of a large Johannesburg retail company says her company receives many loan requests from employees every January. But, she said, employees struggle to repay the loans and “we are not going to extend any loans this year”. Requests for money for school fees, uniforms, books and transport are typical.
Many employees have “garnishee” orders against them, which render them ineligible for company or bank loans. A garnishee order is a court order directing an employer to deduct funds from the indebted employee’s salary and pay the creditor.
“Last year one of our workers was clearing R38 a month because of garnishees,” the HR manager said. Her company now provides advice to individuals with financial problems, but this is often not enough. “Just yesterday [the/a worker] got an order to appear in court for failing to pay his child’s maintenance.”
At this point, many indebted individuals approach money-lenders. Instant cash loans seem an easy way to get out of debt, but usually they are simply making the debt hole deeper.
Last week the Mail & Guardian visited a number of money-lenders in Johannesburg. We found that getting a cash loan is alarmingly easy: no credit checks, and garnishee orders are no obstacle. Loan amounts of up to R10 000 can be deposited into the customer’s account within two hours.
AAA Instant Loans, for example, requires only the applicant’s latest payslip, identity document and bank statements for the past three months. The interest rate is a fat 30% to 35% a month.
Mmapule Noko, a domestic worker from Marlboro, Johannesburg, earns R900 a month. She is disadvantaged by her financial illiteracy. When her husband died four years ago, she put the money from his estate into a 12-month fixed-deposit account that gives her R450 in interest every month. She is not able to access her capital during the rest of the year and doesn’t have enough ready cash to deal with emergencies. She is not aware of alternative options.
This year her son Paul is supposed to go to high school, but his primary school is withholding his results because his mother owes R3 000 in outstanding fees. The new high- school uniform will cost about R2 000, before she has even started buying stationery and textbooks. Noko paid the R1 500 registration fee, but Paul cannot move to the new school without a report and the transfer card. “It’s difficult and embarrassing to go to school without all the books and it’s like everyone knows that you do not have school fees,” he said.
Noko feels she is left with just one choice — getting a cash loan. “I will pay it back with my monthly interest from the fixed deposit,” she said. She doesn’t understand how interest is calculated or the total amount that she will have to repay.
Ministry of Education spokesperson Molatwane Likhethe said that school fees should not prevent children from receiving education. He says such pupils should be allowed to continue their education while parents and the school arrange a written agreement about payment. “This is a matter between a parent and the school. The child’s education should not be affected.”