The DA Youth welcomes the commitment made yesterday by Basic Education Deputy Minister, Enver Surty, that the National Student Financial Aid Scheme (NSFAS) would remove all students it had blacklisted. The Minister of Higher Education now needs to clarify whether and how these students will be required to pay back their loans. Because the students affected are disadvantaged, one needs to be sensitive about reclaiming outstanding amounts. But one cannot write them off, as that would encourage a culture of unaccountability. The DA Youth believes it has the answer:
Instead of the current standard practice – cash-only repayment of loans – the DA Youth proposes a model whereby willing graduates can repay their loans through service to the state in a field related to their area of study on a year-for-year basis. In line with the suggestion of the Ministerial Review Committee report, loan recipients could automatically be registered as taxpayers and issued with a tax number. As soon as they graduate and enter employment, SARS could issue a directive requiring an additional deduction to be transacted in order to settle the student’s study debt.
Thus a doctor, for example, would be able to pay off most of his or her study fees over six years by working for the state for a period of six years after completing his or her community service. Should he or she fail to complete the six-year stint, the remaining balance, plus a penalty fee, would become payable.
In May of this year, the DA Youth presented the Department of Higher Education with our proposals for an overhaul of the NSFAS in order to make it more effective. We have yet to receive any kind of response.
We believe our proposal would go a long way to boosting the debt recovery rate of the NSFAS and ensure that greater resources are available to assist needy future students.
At present, the NSFAS has the second lowest recovery ratio globally among student financial aid schemes. Improving on these collection rates is vital if the NSFAS is to be sustainable in the future, as failure to recover debts significantly impacts on its ability to provide loans to new applicants.
The DA Youth’s proposal would not only provide relief to cash-strapped new entrants to the labour market, but would also provide a means for graduates to obtain on-the-job experience and encourage a massive flow of talent and skill into the ailing public sector.
Media Enquiries:
Mbali Ntuli
DA Youth Chairperson
072 118 8556
Aimee Franklin
DA Youth Director
072 232 0127
6 Comments to “NSFAS: A proposal for blacklisted students to pay back loans”
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Sizwe Nene says:
it’s an houner and priviledge to comment on this given the fact that our youth in this country are completely disadvantaged. I’m in love with the proposal since its provides an alternative way of repaying the debt to the government. These are pertinent issues that requires urgent attention instead of nationalising the mines. Lets the pannel of expert and the stakeholders be given an opportunity to debate about this issue in order to come up with a firm solution to the proposed suggestion.
My special thanks to the proposed issue!
Nako says:
I jst wana know that,is it allowed for a university to blacklist students on its own?
Nako says:
I jst want to kmow..that is allowed for universities to blacklist cash students?
Youth Director says:
Hi Nako. If you have studied at the institution and owe them money in upaid fees, then they can blacklist you after giving you sufficient warning and time to comply. This applies to anyone that owes them money whether they are cash students or loan students.
Estee says:
Obviously there would have to be a threshold of some sort, I just don’t think it would be fair to deduct cash from previously disadvantaged students immediately when they start working. Of course this is not say, they must not pay back at some point
I also think involving SARS (as a debt collector) has a potential to present all sorts of legislative hurdles particularly on the Income Tax Act. and the role of SARS as a revenue collector in the Republic, surely loan payments cannot be “legally” classified as revenue for the state.
I think we should address the problem of unemployment and then when our graduates start getting jobs readily after graduation we can then jack up systems to monitor their income, they do not really have to have Tax Numbers while they are still at varsity, instead NSFAS can simply link its debt collection unit to SARS, I still don’t understand why they are not doing that [maybe the confidentiality of information presented to SARS plays a role here as well] but nonetheless, it would be quite easy to track one’s income this way .
There should be a clear line between someone who is blacklisted because he is unemployed and cannot afford to pay back the loan and someone who is refusing to pay back the loan. When this announcement was made it appeared to me that 90% of the guys that were celebrating victory are actually full time employees who simply refuse to pay back what is DUE to NSFAS.
All in all let capacitate NSFAS’s ability to differentiate between those that do want to pay and those that cannot afford to pay, the latter being a group that should not be blacklisted. You payment in kind suggestion is genius, needs more than just money from its youth, we should not downgrade the relationship that exist between us and the state to mere “business” transactions
Bheka Ntuli says:
This is the good proposal and if the committee does not welcome it then we will have to raise a call for recalling the Higher Education Minister and Chairman of the NSFAS Board because their uselessness is becoming a major problem to students!