Universities & TVETs Carry R62 Billion Student Debt, as NSFAS Implodes

Statement by Dr Delmaine Christians MP – DA Spokesperson on Higher Education and Training:

The briefings presented to Parliament today by the Department of Higher Education and Training (DHET), Universities South Africa (USAf) and the South African Public Colleges Organisation (SAPCO) confirmed that South Africa’s post-school funding system is under severe and growing strain.

The figures presented to the Committee are deeply concerning.

Universities alone now carry approximately R59 billion in student debt, including around R29 billion linked to NSFAS-funded students, while more than 188,000 graduation certificates are currently being withheld due to outstanding debt.

The TVET sector faces a further R2.5 billion debt burden affecting more than 466,000 students, with more than 20,000 certificates currently withheld nationally.

This is no longer simply a student debt issue. It is becoming a systemic funding and governance crisis affecting students, institutions and the broader economy.

The solution to the student debt crisis is urgent economic growth so that graduates get work, and pay back their student debt.

But the urgent reforms we need remain blocked by stubborn ANC ideology – so students bear the debt and tertiary institutions carry the financial risk. This must change so that jobs can be created.

One of the most alarming aspects raised during the meeting was the continued failure to resolve NSFAS reconciliation and close-out processes between NSFAS and institutions. The Department itself acknowledged that these problems continue contributing significantly to historical student debt and that proper operational integration between NSFAS and institutions remains unresolved.

This raises serious concerns about how much debt reflected against students may stem from unresolved administrative failures, delayed payments, accommodation disputes and broken data systems rather than deliberate non-payment by students.

Students cannot become permanent casualties of unresolved administrative battles between NSFAS and institutions.

The DA is particularly concerned that many graduates remain trapped in a devastating cycle where they cannot access employment opportunities because their certificates are withheld, while institutions themselves are increasingly unable to recover debt due to rising unemployment and financial hardship.

The presentations also revealed growing pressure on universities and TVET colleges to sustain themselves financially as expenditure growth increasingly matches income growth, debt impairment levels continue rising, and institutions become more reliant on fee income and third-stream revenue sources.

The situation within Universities of Technology and parts of the TVET sector is especially worrying, with some institutions carrying debt levels and bad debt ratios that place increasing pressure on long-term sustainability.

The DA believes South Africa urgently requires:

• a fully integrated NSFAS and institutional data management system;
• accelerated finalisation of all NSFAS reconciliation and close-out processes;
• a realistic and sustainable missing-middle funding model;
• expanded affordable student accomodation support;
• and a national framework regulating the withholding of certificates.

The DA reiterates our call for the scrapping of NSFAS in its current form. NSFAS must be replaced with a new decentralised student funding model, where accredited and competent higher education institutions administer their own funding, removing failing intermediaries and reducing governance, procurement and payment failures.

South Africa cannot claim to prioritise skills development and youth employment while financially trapping qualified graduates outside the economy.

The longer government delays meaningful reform, the deeper this crisis will become.