Debt collectors are looking for students who owe more than R60 billion to institutions of higher education, as more than 190 000 are holding degrees and certificates. These students owe universities R59 billion, while TVET colleges are owed R3.6 billion.
This came from a meeting of the Department of Higher Education, when he presented a report to the Parliamentary committee on student debt.
The director general of the department, Dr Nkosinathi Sishi, said that the problem of withholding of qualifications is also increasing in TVET colleges. He said they are worried about the annual increase in student debt, which makes them end up holding back their degrees.
“We received legal advice that revealed that institutions have the right to collect debts after a complaint about degrees being deducted. It is something that seems to be far from over due to the increase in debt every year,” he said.
Dr. Phethiwe Matutu, the chief executive officer of the organization that represents the management of universities, Universities South Africa (USAf), told members of Parliament, that out of the R59 billion university debt, R29 billion is still funded by the National Students’ Financial Aid Scheme (NSFAS).
“R12 billion of this money looks like it will sink and we will no longer be able to collect it from the debtors. There are 188,209 students who are holding their degrees because of indebtedness to the universities. We agreed that it should not be a last resort to hold degrees if all other efforts to collect the debt have failed. We agreed with the management of the universities that the debtors must be given letters stating that they have completed their degrees when they are wanted by employers,” he said.
He said institutions use different methods to collect debts such as hiring debt collectors. He pointed out that those who are funded by NSFAS, owe money because the people of this fund set the amount of money they pay for residential properties.
“You find that some places cost more than the NSFAS rate, which creates a debt. That debt then falls on the student.”
In this meeting it was revealed that there are 20 950 certificates held for TVET borrowers. Colleges are owed R3.6 billion by students.
The chairman of the committee, Mr. Tebogo Letsie, complained that the money owed to those sponsored by NSFAS is too much.
He said it is worrying because these students are poor and some of them cannot get a job because of debt.
It was also highlighted that institutions are hit with increasing debt because they rely on money paid by students to be able to work and pay employees.