University graduation ceremonies: a celebration of years of hard work, determination, and self-sacrifice for most students, marking the promise of what is yet to come. For some, however, receiving their hard-earned degree or diploma remains elusive – with outstanding fees standing between them and their qualifications. Mala Suriah, the CEO of Fundi, explains what this can mean for student futures and future opportunities.
Student debt remains a growing global problem. In South Africa alone, 2024 is already seeing thousands of students unable to graduate due to outstanding fees owed to tertiary institutions totalling billions of rands. “This situation has been exacerbated by a complex interplay of factors, including the changing landscape of educational funding and economic challenges. As student debt continues to grow, however, it not only affects individual futures but also the sustainability of our local tertiary institutions,” explains Suriah.
She notes that many tertiary institutions are taking a two-pronged approach to solving for outstanding balances: raising money themselves to try assist indebted “missing middle” students, as well as the more unfortunate option of using debt collectors to try and recover fees.
“Both stakeholders essentially find themselves in an impossible situation. This has seen universities start to take more radical steps to prevent debt from being incurred upfront. At the University of Johannesburg (UJ)[1] for instance, students are required to sign an acknowledgment of debt upfront, as well as pay 50% of outstanding fees before registration – positioning UJ to be able to take legal action as required.”
Self-paying tertiary students remain the biggest debtors – moving the challenge back into the “missing middle” space. “At UCT for example, 6% of 2023’s student fees are outstanding, with self-paying students owing 87% of that. NSFAS students owe 8% and students with partial bursaries are responsible for the remainder,” says Suriah.
These students find themselves in “no man’s land” – trapped without the credentials they need to apply for jobs that would enable them to repay their debt. “Graduates who are unable to enter the formal workforce can often become burdens on their families and in their communities – moving back home to prevent accumulation of more debt. Being back at home and unemployed, however, can often make it harder to remain motivated about finding a job or a way to repay what they owe.”
Perhaps the biggest misperception facing these students and their parents, however, is that there are no alternative options available to them. “By consolidating the debt owed to the institution and obtaining a loan to pay it off, students can still receive their qualification, use this to apply for a job, and start working to repay what they owe,” says Suriah.
Given the critical need for this solution, this type of funding has become one of Fundi’s most sought-after offerings. “This funding is an automatic extension of our brand essence of all things education and finding relevant practical solutions that meet real needs. For us, this funding in particular is an enabler. It gives a student the real opportunity to overcome a critical barrier to market entry and start the next chapter of their career journey. We encourage students who find themselves in this situation to reach out and explore the options available to them,” she says.
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