The higher education fees increase proposed by the government could be a death knell for students already struggling financially, says DebtBusters CEO Ian Wason.
“South Africa already has a poor savings culture, but this is perpetuated by young people getting into debt to pay for their studies, before they are employed,” said Wason.
According to Wason SA students’ financial health was extremely poor and represented an “underlying stress at the moment”.
Wednesday was the seventh day of student uprisings nationwide against a proposed 6% cap on university fee hikes for 2016. Students are demanding a 0% increase.
Several universities initially proposed a 10.5% increase, which sparked sometimes violent protests around the country.
On Wednesday students stormed parliament as Finance Minister Nhlanhla Nene prepared to deliver his Medium Term Budget Policy Statement. Despite the chaos outside parliament Nene delivered a conservative mini budget almost an hour later than scheduled.
Braving the crowd following his speech, Nene called for a long-lasting solution to financing higher education.
Nene earlier told parliament that the student fee protests reminded government “of the challenges of financing the expansion of further education and university opportunities”.
“(The) disruption of learning is not constructive,” he said. “But Minister Nzimande has rightly indicated the need to strengthen student financing further and to find solutions where current arrangements are inadequate.”
Wason said students are already struggling to meet the costs associated with higher education and such a large increase will make it even more unattainable for many.
“The reality of the cost of higher education means that many students are in debt long before they are employed and have a means of paying it off.”
According to Wason it was not just the initial cost of the loan that was an expense to students and their families, but the interest charged and the time it would take to pay back the loan as well.
“Students are also required to apply for a new loan for each year of study, with the application requiring proof of registration from the university and the cost of study for the year,” he said.
More needs to be done to make education more attainable and affordable, while also allowing the institutions to generate the income they need to offer students the range of academic and social services that students want and expect, Wason said.
He called on the government to urgently address the issue of young people being forced into debt, as South Africans are already drowning in debt.