LEARNING CURVEBALL: Student debt policy puts Rhodes, students at odds

Student funding may not be failing because of a lack of money, but because of how that money is managed.

Dr Simphiwe Madikizela, a senior lecturer at Unisa’s Graduate School of Business Leadership (SBL), says “poor planning, weak and inefficient systems and processes” at institutions responsible for funding students mean money does not always reach those who qualify.

His warning comes after protests at Rhodes University in Makhanda last week over a proposed fee payment protocol, which resulted in 13 students being arrested and later released.

Under the proposed policy, students must clear 50% of outstanding debt and tuition fees by the end of 2026 to register for the 2027 academic year.

Rhodes University spokesperson Olwetu Gwanya said, “The proposed 2027 protocol on the payment of student fees is a response to the unsustainably growing levels of student debt and the need to ensure the university’s long-term financial sustainability while maintaining access to higher education.”

For undergraduates with outstanding debt, the proposal is a 50% upfront payment towards that debt, with the balance paid under set arrangements. Rhodes says the plan also stretches the payment period to ease pressure on families. It says it has found that most students do not honour the payment arrangements they sign at the start of the year, which contributes to the accumulation of the debt.

The university explained that of 9,532 students, 5,039 are self-funded and 4,493 are funded by the National Student Financial Aid Scheme (NSFAS). “The protocol does not apply to NSFAS-funded students whose funding has been confirmed,” said Gwanya.

In August, a student protest at the Cape Peninsula University of Technology (CPUT) erupted after the university attempted to introduce a financial recovery plan, forcing postgraduate and unfunded students to pay an upfront R7,000 fee covering registration and accommodation.

CPUT subsequently withdrew the plan pending further explanation, clarification and thorough consultation with appropriate stakeholders, including student representatives. The university had a student debt burden of R2.1-billion.

‘Take all possible measures’

As previous university protests have shown, Rhodes is not an isolated case. Prof Thandi Lewin of the Department of Higher Education and Training (DHET) said the sector is carrying about R30-billion in historic student debt, much of it impaired, as institutions consider measures to keep teaching and essential services running.

“The Department of Higher Education and Training tracks the financial health of universities by analysing the annual financial statements and requires that institutions take all possible measures to ensure financial sustainability,” said Lewin. “Universities are heavily reliant on tuition fees for their core income and therefore need measures in place to ensure reasonable levels of financial sustainability.”

Lewin said the department was aware of the financial strain that students and institutions were under and was engaging with the sector about solutions. 

She said, “For students who fall outside the existing NSFAS funding criteria, commonly referred to as the ‘missing middle’, work is continuing on the broader student funding framework. The department is progressing towards a more comprehensive student funding process to address gaps in the current funding system.”

‘A balancing act’ 

Unisa’s Madikizela said the difficulty in funding students is not always a lack of money, but weak planning and systems in some of the institutions mandated to fund them.

“The solution,” he said, “is to have a well-coordinated and capacitated entity that is run by a highly skilled, experienced and capable team of experts and managers who can plan properly, put in place processes and systems that are efficient and effective, with proper monitoring to ensure that the funds reach the deserving, qualifying students on time.

“There are models that have been tried and tested where funds can be transferred directly to the various universities for students that are registered at the universities to access the funds quickly, timeously and efficiently and effectively; universities have capacity, proper systems and processes in place where funds can be accounted for and audited with transparency.”

After Rhodes secured a court interim interdict against the protests, the SRC says it met with management, who considered its memorandum “fully”. The SRC said the meeting produced the following outcomes:

• Management welcomed an inverted sliding scale, in which students with larger debts would pay a smaller upfront share, but said legal provisions prevent the use of a means test. It will reconsider the proposal.

• Instead of a blanket R3,000 monthly payment, student leaders were asked to propose an affordable and feasible amount.

• Management agreed that a R25,000 residence debt threshold may not be workable and will model the impact of a R75,000 threshold.

• From 2027, June results will be released regardless of students’ outstanding debt.

• The SRC wants a 15% discount for settling debt. Management is open to credits of R1,000 to R5,000 for each distinction, but no agreement was reached.

A student who spoke to Daily Maverick on condition of anonymity said the proposal could have a significant impact. Although she is NSFAS-funded and therefore not subject to the proposed protocol, she said accommodation costs above the NSFAS cap could still leave her in a “crisis”.

“I know what it’s like to owe R100,000 at a university, and the school kept on saying that NSFAS students are not affected, but I would like to say that we are affected because our residence fees are way too high. Residence on the lower campus is R92,000. Here, on the upper campus where I stay, it’s R97,000,” said the student.

She added that the NSFAS cap is another hurdle that contributes to student debt as it does not fully cover the costs.

Tebogo Letsie, chairperson of Parliament’s Portfolio Committee on Higher Education, told Daily Maverick that NSFAS-funded students cannot be expected to find money they do not have. Although their study costs are fully funded, he said, universities sometimes place them in accommodation that exceeds the NSFAS funding cap, leaving students to cover the shortfall.

“We also can’t have access restricted because a council at that institution has taken a decision that will exclude thousands of students whose parents can’t afford to pay. Universities must negotiate with students affordable payment plans that will ensure self-paying students can afford,” said Letsie.

He said Parliament was reviewing the Higher Education Act to establish standardised statutes across universities on matters that affect students and institutions alike.

“This will ensure that a student at UCT is treated the same as a student at VUT,” said Letsie.

With tensions now appearing to have eased, Rhodes University said it continued to engage with the SRC and that the proposal remained subject to approval by the university’s council.

“The engagement with students and student leadership will therefore inform the university’s consideration of the issues raised before the matter is finalised,” said Gwanya. DM