Dropouts owe billions in student loans

Struggling university students owe R13.2-billion in tuition and accommodation fees.

The Sunday Times has established that thousands of students at 14 of the country's 23 tertiary institutions are liable for more than R2-billion in outstanding fees for this year alone.

At least R788.2-million of the R2-billion will be paid by the National Student Financial Aid Scheme (NSFAS), which funded 111710 of the more than 760000 students this year.

A total of 17 institutions are also still battling to recover a further R827.6-million in fees from previous years, while eight were forced to write off almost R70-million in bad debts this year.

Graduates who were granted study loans over the past 11 years owe R3.3-billion to the NSFAS, while a further R7.1-billion is owed by more than 530000 students who are still studying or have dropped out.

A ministerial committee that conducted a review of the NSFAS last year found that 316320 students - almost half of the borrowers - had dropped out of university over the past decade, making it very difficult to recover loans awarded to them. The NSFAS loans only become repayable once the borrower finds employment.

Higher education and training director-general, Professor Mary Metcalfe, said that her department's minister, Blade Nzimande, was "concerned about rising student debt".

Vice-chancellors this week described the crippling debt as "a crisis".

A Sunday Times survey of student debt found that historically disadvantaged universities such as Walter Sisulu, Zululand and Limpopo are collectively owed more than R1-billion in fees for this year and previous years.

The embattled Walter Sisulu University in the Eastern Cape is owed almost R389-million, including R121.9-million in fees for last year.

The university, according to a financial report presented at an executive management meeting last month, has projected a deficit of almost R66-million by the end of this year.

Its total income for the first seven months of this year was only R567.8-million - but R387.9-million went towards staff salaries.

The University of Limpopo confirmed that it had so far only managed to collect R225-million of the R435-million in fees levied this year. The payment deadline for student fees expires in two weeks' time.

The university said that the NSFAS would contribute R61-million towards the outstanding R210-million debt, while students would be liable for the remaining R149-million.

Other institutions battling to collect this year's outstanding fees include:

• The University of KwaZulu-Natal: R239.9-million, of which R42.1-million would be paid by the NSFAS;

• The Tshwane University of Technology: R212.4-million;
• The Durban University of Technology: R179-million;
• The University of Johannesburg: R152.3-million;
• The North West University: R142.3-million;
• The University of the Western Cape: R103.9-million; and
• The University of the Free State: R100-million.

Some institutions, such as the University of Johannesburg, are resorting to extraordinary measures to recover outstanding debt, such as getting credit bureaus to blacklist defaulters. Almost all of them are withholding exam results, as well as diploma and degree certificates until arrears are settled.

Walter Sisulu University's vice-chancellor, Professor Marcus Balintulo, described their student debt as "critical".

"Our residences, where students are openly squatting, is in a crisis situation. If you say you are going to evict them, the question is where would they go?

"We have to juggle around and sometimes we delay paying (for services). It's a tough situation."

Professor Nehemiah Mokgalong, vice-chancellor of the University of Limpopo, said that the university needed a further R63-million to assist needy students to pay their fees.

"Both the funding framework and the allocation from the NSFAS has to be reviewed. It's putting a damper on the way we run the institution because we don't have that cash."

Mbali Hlophe, secretary-general of the South African Union of Students, described the blacklisting of students as "unfortunate and short-sighted".

"The ANC-led government has endorsed the provision of free education till undergraduate level for the poor. We call for the speedy realisation of this resolution," she said.

Economist Dawie Roodt said the figures were an underestimation of the country's student debt. "There could be a lot more debt that is not captured in the official figures; for example, students borrowing from banks."

Metcalfe said the non-payment of fees could have an impact on teaching and learning in the long term.

"It's factually correct that institutions like Walter Sisulu and the University of Limpopo, among others, require more funds for student loans than is currently available," she said.