Student loan defaulter finally traced
Senior government staff and company directors are among those who have not repaid their loans
One former student – out of 247 913 who collectively owe the higher education department’s loan and bursary scheme a staggering R6.4billion – is in negotiations to repay a R217 496 study loan.
The National Student Financial Aid Scheme (NSFAS) this week confirmed that the engineering student, who studied at the University of Cape Town, was the biggest debtor on its books.
At least 190 284 of the 247 913 debtors, who were traced by the South African Revenue Service (Sars), are employed. Of those, 81 000 are in the government’s employ. Startlingly, tens of thousands dropped out before completing their studies.
The fund’s chief executive, Msulwa Daca, is to call on directors general and deputy directors general in government departments, as well as chief directors and their deputies and directors, to pay back what they owe to NSFAS.
Kagisho Mamabolo, the spokesperson for the fund, said Daca will also contact directors of private companies to make payments. “I’m talking about people working in senior positions, both in government and the private sector, who take salaries of more than R30 000 a month home and never think of paying.”
The fund, which provides financial aid to students from poor and working-class families, will not be able to collect the outstanding debt from the remaining 57 629 debtors until they find jobs.
Mamabolo said Sars had traced the engineering student late last year by identifying him as a registered taxpayer. “This information is provided to us from time to time by Sars and is used to make contact with nonpaying debtors.”
The former engineering student received study loans for the periods 2004 to 2009 and 2012 to 2014.
Mamabolo said those earning R30 000 and more annually were obliged to repay their loans by initially paying a monthly instalment equivalent to 3% of their annual salary. A person earning R30 000 annually would pay R84 a month towards the debt.
From the time it was established in 1991, the fund has assisted almost 2.6-million financially needy students to the tune of R51-billion. But more than half of them dropped out before graduating.
“I take a very dim view of those who don’t repay their loans. I was assisted by NSFAS and so was our chief executive [Daca]. Every house in South Africa that is disadvantaged has a beneficiary of NSFAS, so by paying back your NSFAS money, you are assisting your own brother and sister at home. If you don’t pay back, you are saying your brother and sister must not go to school. It’s quite selfish.”
A student who qualifies for financial aid can receive up to R72 000 to cover tuition fees, accommodation, food, books and transport costs.
Mamabolo said the 190 284 debtors who were employed had been sent statements and they had also been contacted by collection agencies.
“We are also waiting on listing them as defaulting debtors. If a borrower fails to make repayments, his or her name may be placed by the board of the NSFAS on any list of defaulting debtors.”
He said there could be a number of reasons for why former students failed to repay their loans: “It could be that you did not get your statement, so why should you pay if you are not reminded that you have a debt? There could be a number of other reasons.”
An executive from each of the three leading banks was seconded to the fund in March to assist in the governance and running of the organisation.
Higher Education and Training Minister Blade Nzimande told Parliament last month that his department had appointed Nexus Forensic Services in September last year to conduct a probe into allegations of fraud and corruption in the allocation of funds at 10 universities and technical and vocational education and training colleges.
He said the investigation, which would cover the 2012, 2013 and 2014 academic years, was aimed at finding out the extent of misrepresentation and fraud committed by students who had received financial aid.
The audit would, among other things, include applicants and family members and guardians who knowingly provided false information on their application forms.
Senior government staff and company directors are among those who have not repaid their loans.