Editorial: Ditch the debt of smart students
South Africa’s student indebtedness is minuscule compared with the $1.2-trillion owed by their American counterparts, but it’s still a crippling factor for access to higher education and employment. The local student gross debt, currently sitting at about R5-billion, has been growing at an average of 2.3% a year.
And whereas American student debt is becoming a national crisis – it’s the second-biggest consumer debt after mortgages and has surpassed credit card debt – South African student debt appears manageable.
It almost spiralled out of control in the mid-1990s, when campuses were in turmoil as students demanded (among other perennial complaints) the cancellation of their debt. A decade later, it has stabilised.
Yet this debt presents moral, political, legal and ethical questions for desperate students and universities. So desperate are some American students that they have turned to sugar daddies to pay their college fees. Sugar daddies have prowled South African campuses for years, but that doesn’t seem to have solved the problem. The debt has forced universities to take harsher, more ruthless and sometimes illegal action against students.
We reported last month that students at the University of Venda were handed outstanding bills at their graduation ceremonies – instead of their degrees. Last week we described how 32-year-old Sello Molewa couldn’t get his BA degree because he owed the University of Limpopo R9 770. Thankfully, a Good Samaritan came to his rescue this week and paid his bill. But the damage is already done: Molewa couldn’t use his acquired knowledge to find a job. He and other graduates drowning in debt are victims of the high cost of higher education, low government subsidies, the corporatisation and maladministration of universities, the apartheid legacy and the mismanagement of student loans.
The last-named has a direct impact on their future, and has often led to their misery. The National Student Financial Aid Scheme (NSFAS) was the most innovative post-apartheid way of funding tertiary education for bright but needy students, by means of a fund split into two parts: loan and bursary. As you pass, and the more quickly you do so, the funding of the bursary component is increased.
Hundreds of thousands of needy students were given an opportunity to study by NSFAS – but with debt hanging over their heads on graduation. Those who managed to get a job early paid back the loan part. But the allocation of NSFAS grants to universities and their distribution to students is a nightmare, resulting in students such as Molewa graduating without degrees. This is despite NSFAS having recorded a surplus in its financial statement: “There is a reported surplus in the financial year under review, mainly as a result of projects and spending plans that have been committed but not yet undertaken,” NSFAS chief executive Msulwa Daca admitted in his report last July.
The fund is incompetently administered, despite its having employed more staff. The auditor general has expressed concern about how NSFAS, which budgeted for R6.2-billion in student funds, is led: “Leadership did not exercise sufficient oversight of compliance with legislation relating to revenue management and the related internal controls to prevent material misstatements, as actions committed to by management to address the internal control deficiencies reported in the prior year were not sufficient to prevent repeat audit findings.”
Even though the poor administration of NSFAS has led to students incurring unnecessary debt and having their qualifications withheld, the remainder of student debts emanate from indigent students unable to fund their tuition fees. Most of them manage to register and – through institutional debt relief – graduate without settling their dues with universities, but others like Molewa were not so lucky.
Why are universities so unforgiving and punitive? Tertiary institutions are under pressure to sustain their costly operations, transform their campuses and produce quality results. Some of the universities achieve these results by charging exorbitant fees and consequently excluding some students who cannot afford to pay. These institutions battle to find the balance between providing a public service and making themselves profitable. They hoard millions in reserves and invest in noneducational portfolios.
The majority of institutions and students are failed by politicians who vowed but failed to curb rising costs. From Sibusiso Bengu, the first democratic education minister, to Blade Nzimande – the first minster dedicated to higher education, now a department unto itself – the promises have turned out to be empty. Every year we celebrate the increase in the number of matriculants passing with university exemptions – 23% in 2010 and 28% last year – but this achievement has not been translated into adequate support for universities. Granted, tertiary institutions’ subsidies (R30-billion in the current financial year) have been rising at an average of 8% annually, but not in real terms. The impractical and unreasonable expectations placed on universities mean that the costs of achieving a high graduation rate are transferred to students.
For Nzimande and NSFAS, a better-managed student fund and cancellation of the debt of needy but smart students should be a priority. The Congress of the People declared in Kliptown 50 years ago that the doors of learning shall be opened. It was three decades before the ANC came to power. After two decades of ANC government, students such as Molewa can attest to the opening of the doors of learning – but at a high cover charge.