​Missing middle students add to universities debt load

Universities have expressed fears that debt will spiral out of control after the department of higher education requested that they allow “missing middle” students who owed money to register next year.

The request was made by the department’s director-general, Gwebinkundla Qonde, who asked the country’s 26 institutions to develop and communicate transparent student debt policies for those who were not beneficiaries of the National Student Financial Aid Scheme (Nsfas).

In September, higher education minister Blade Nzimande announced that government would pay the fee increase for students from households with an annual income of up to R600 000.

Lesiba Seshoka, spokesperson for the University of KwaZulu-Natal, conceded that allowing indebted “missing middle” students to register would make it more difficult to collect the outstanding debt.

“There is no indication from the department how this [collection of outstanding debt] is going to be managed. If the intention is to transfer this debt to NSFAS or the missing middle instrument in development, that should be clarified.”

He estimated that between 30% to 40% of students at UKZN fell into the “missing middle” category.

A random survey by the Mail & Guardian has revealed that student debt at just four universities was over R1-billion.

Luthando Tyhalibongo, spokesperson for the University of the Western Cape, said their historic debt stood at R283-million with the majority of students owing money coming from the “missing middle” category.

“As part of the payment plan agreement for “missing middle” students, in the past a certain percentage of outstanding debt was expected to be paid off as a lump sum before registering for a new year.”

Said Tyhalibongo : “We are concerned about the rate of student debt collection that has deteriorated since the #FeesMustFall campaign as many students and parents have communicated that they do not wish to pay as they believe that it is inevitable that South African higher education will be free.”

He, however, said that the impact of allowing “missing middle” students with debt to register next year would be minimal.

“We do impress on students to pay their debt as we are a fee paying institution.”

Stellenbosch University, meanwhile, did not have reserves “to simply write off outstanding debt”.

The university’s spokesperson, Martin Viljoen, said the matter formed part of discussions with the department.

“The outcome of these discussions should provide clarity on the approach that universities can take in this regard in years to come.”

He said that the institution had taken note of Qonde’s request, adding: “The university is unfortunately not in a position to comment as it still needs to liaise further with the department on certain points that are unclear at the moment.”

Louis Jacobs, spokesperson for North West University, confirmed that they were owed R324-million.

“The matter will have to be managed very carefully to ensure that it does not create a financial risk for the university.”

He said academically deserving students were assisted with payment arrangements to settle outstanding debt.

Mike Khuboni, spokesperson for the Vaal University of Technology, said that it was owed about R400-million.

“The university welcomes the funding allocated to assist “missing middle” students which will ease the burden on universities to deal with this category of students,” he said.

Meanwhile, the University of Free State said it could not provide details as it was in the process of “sourcing” information about their “missing middle” students.

The University of Johannesburg said that its 2017 budget and the effect of student debt on its cash flow would be considered by the council at the end of this month.

Qonde said the request to allow missing “middle students” with outstanding debt to register next year did not mean they would be exempted from settling it.

“Institutions normally make payment arrangements with the affected students,” he said.

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Prega Govender
Prega Govender is the Mail & Guardians education editor. He was a journalist at the Sunday Times for almost 20 years before joining the M&G in May 2016. He has written extensively on education issues pertaining to both the basic and higher education sectors.

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