Nearly R10 Billion Student Debt Racked Up Since 2023. South Africa is grappling with a mounting student debt crisis, with universities owed a staggering R21.7 billion since 2023. This financial burden not only hampers higher education institutions’ operations but also impedes graduates from accessing their qualifications, thereby affecting their employment prospects.
The crisis is particularly acute among the “missing middle” students those whose household incomes exceed the R350,000 threshold, rendering them ineligible for government bursaries, yet still unable to afford tertiary education costs.
Scope of the Crisis
According to Universities South Africa (USAf), of the total student debt accumulated, R9.3 billion is considered recoverable, while R12.4 billion is deemed unlikely to be fully recovered. This debt accumulation poses a significant threat to the financial stability of universities, especially those with large student populations from lower socioeconomic backgrounds. Dr. Phethiwe Matutu, CEO of USAf, warns that continued reliance on expected but unrealized funds could lead institutions toward insolvency.
Impact on Students and Graduates
The inability to settle outstanding fees has dire consequences for students. Many are unable to graduate or receive their certificates, which are essential for securing employment. This situation traps graduates in a cycle of poverty and unemployment, undermining the very purpose of higher education. The “missing middle” students are disproportionately affected, as they fall outside the eligibility criteria for financial aid yet lack the means to fund their education independently.
Student Debt Relief Bill
In response to the escalating crisis, Member of Parliament Sihle Lonzi has introduced the Student Debt Relief Bill, 2025. This proposed legislation aims to establish a Student Debt Relief Fund to assist qualifying students in settling their outstanding tuition fees. Notably, the bill stipulates that students who have met academic requirements should receive their qualifications, regardless of unpaid fees
The bill also proposes the creation of a Qualifications Registrar, a central government body responsible for the distribution and administration of qualifications and certificates, working in collaboration with public institutions. This measure seeks to prevent financial constraints from hindering graduates’ career prospects.
Eastern Cape’s Investment
The Eastern Cape Provincial Government, in partnership with the Manufacturing, Engineering, and Related Services Sector Education and Training Authority (MerSETA), has launched a R70 million debt relief initiative. This program targets unemployed graduates aged 18-35 who have completed undergraduate qualifications in MerSETA-related fields. The initiative aims to eliminate financial barriers that prevent graduates from accessing job opportunities and contributing to the economy.
Student-Led Efforts: UNISA’s SRC Campaign
At the University of South Africa (UNISA), the Student Representative Council (SRC) has intensified efforts to address the student debt crisis. Recognizing the alarming number of students burdened with outstanding fees, the SRC has launched a campaign across regional centers to raise funds aimed at alleviating student debt. The goal is to provide students with the opportunity to clear historical debt, enabling them to register, pursue further studies, and enter the workforce.
Calls for Private Sector Involvement
The South African Student Congress (SASCO) has emphasized the need for the private sector to play a more active role in addressing student debt. While individual entities offer bursaries and scholarships, there is a call for a more coordinated effort, including the implementation of a tax-based system where companies contribute to education funding.
Conclusion
The student debt crisis in South Africa is a multifaceted issue that requires a comprehensive and collaborative approach. Legislative measures like the Student Debt Relief Bill, provincial initiatives, student-led campaigns, and private sector involvement are all crucial components in addressing this challenge. By alleviating the financial burdens on students and ensuring access to qualifications, South Africa can empower its youth, promote economic growth, and foster a more equitable society.
