How student debt will aid in the downward slide of South Africa

EDITORIAL

Functioning universities are just as important to the economy as the country’s state-owned entities.

It is also easy to draw a straight line between Eskom’s debt and the failings of our burnt-out economy, which has endured 15 years of load-shedding. When Eskom is allowed to fall deeper into financial disarray, and it can’t maintain its ageing infrastructure or hold onto the people with the right skills to get the job done, the lights go out. 

We all feel it. Like the flick of a switch, work stops, dinners are served cold and anger swells in even the most gentle hearts.

Today, students and universities are being held hostage by debt, which has snowballed to more than R16-billion and keeps growing at about R2-billion a year. 

Compared with the amount of debt that some of our other public institutions have, this amount might seem like a drop in the ocean. This makes it easy to understand why we might be more preoccupied with, say, Eskom, which has watched the debt owed to it by municipalities grow and grow to more than R46-billion. This is on top of the breathtaking R369-billion the state utility owes to its lenders.

But when universities are allowed to crumble under the weight of debt, we will see more than lights going out. First, there is a dimming behind the eyes of students, many of whom find the burden of the fees struggle too heavy to keep going. Whatever spark is left threatens to be ignited by the flame of despair. And universities become sites of intermittent unrest that is snuffed out when the struggle becomes too exhausting. 

Eventually, the institutions of higher learning, where so many discover their dreams, will also run out of steam. What then? Where will the skills force this country needs come from?

Writing about United States President Joe Biden’s recent announcement that his government would start clearing student debt, esteemed US economist Joseph Stiglitz said the level of distress created by this burden is bad for the economy.

Building up the labour force and helping people find jobs better matched to their skills is so important, Stiglitz said, and a comprehensive student-loan debt-cancellation programme will have a valuable economic upside.

South Africa’s labour force has been gutted. And it is a fact that graduates, in an economy designed to favour the skilled, are more likely to find jobs. 

We can’t be left clamouring, like Eskom, to find those with the skills we need to keep the lights on.