Portion of new funds to go towards student debt

The Department of Higher Education and Training will use part of the increased funding for the sector announced in the budget to settle debt owed to universities by continuing students, deputy director-general for university education Diane Parker said on Wednesday.

Former finance minister Malusi Gigaba announced last week that an extra R57bn had been added to the baseline for higher education over the next three years, in addition to the R10bn extra provided in the October adjustment budget.

The lion’s share of the new funding is destined for the provision of free higher education for first-time entrants from poor and working-class families, but some of the money will be used to alleviate the financial pressure facing universities from student debt, said Parker.

Many continuing students who qualified for support from the National Student Financial Aid Scheme had run up debt because their families failed to make the expected contribution to their studies or because the cost of their chosen course was higher than the R67,000 scheme cap, said Parker.

“This debt sits with universities and puts them under significant financial pressure,” she said. The scale of the debt had yet to be quantified.

Once students signed an acknowledgment of debt, the government would conduct a due-diligence exercise and ensure the debts were paid, she told Business Day after addressing Parliament’s portfolio committee on higher education.

Parker told MPs that universities were to get a significant increase in funding for clinical training of health professionals this year, to take account of underfunding in previous years and of a large group of medical students who were in the final stages of their studies in Cuba and would return to complete their training in SA in July.

The grant for clinical training of health professionals would rise from R475m in 2017-18 to R574m in 2018-19, up 20.5%.

She said it was vital for universities and technical and vocational education and training colleges to stick to their enrolment plans as the government phases in free higher education. The funding was based on agreed enrolment plans. “Tight management of these plans is essential,” Parker said.