Nzimande hops on student loan bandwagon
History has repeated itself. Six years ago former president Jacob Zuma, under political pressure to step down over claims of corruption, announced the government would provide free higher education to students from poor and working-class families. His shock move had no budget to back it and was at odds with recommendations of the Heher commission, which had concluded free higher education was unaffordable.
Now higher education, science and innovation minister Blade Nzimande, who is mired in a corruption scandal of his own, has announced a half-baked loan scheme for the “missing middle”. These are students who do not qualify for free higher education because they come from families with an annual income above R350,000, but are too poor to afford fees. Clearly concerned with deflecting attention from his own troubles, which centre on allegations that he received kickbacks from service providers to the National Student Financial Aid Scheme (NSFAS), Nzimande is brazenly making a promise to a key political constituency without any real concern for its financial implications.
According to the minister, the first phase of the new financing mechanism for the “missing middle”, which comes into play this year, will provide loans to 47% of the more than 68,000 students who come from homes with an annual income of R350,000R600,000. The R3.8bn required to honour this pledge is to be clawed from the National Skills Fund and the Sector Education and Training Authorities. The second phase is to run from 2025 to 2034, but Nzimande gave no indication of how it is to be financed, save for a vague assurance that the government will contribute “seed funding” that will rise from R3.1bn to R4bn over the period.
He says the loan scheme is based on recommendations from the ministerial task team he appointed to look into student financing. The extent to which he has stuck to its recommendations is anyone’s guess, as he has yet to make its report public.
Bizarrely, with a month to go until the start of the academic year, he has provided no details of how students will be selected, what the terms of the loans will be or how they will be recouped. Worse still, the task of administering the loans is to fall to NSFAS.
Not only is it doing a terrible job fulfilling its obligations to its 1.1-million bursary beneficiaries, but it also had a bad recovery rate when it administered student loans before 2018. A far better arrangement would be for the banks to administer governmentbacked loans, recovered in collaboration with tax authorities.
The tragedy of Nzimande’s announcement is it will weaken the university sector and deepen inequality. Zuma’s promise of free education forced the Treasury to make deep cuts to universities’ core funding, undermining their ability to invest in infrastructure and attract top talent. It also slashed expenditure on key services such as health and basic education. Nzimande’s illconsidered policy will force the Treasury to rob Peter to pay Paul and SA’s most vulnerable citizens will pay the price.