Nzimande outlines student debt plan

Cape Town - In an effort to reduce debt owed by students, the National Student Financial Aid Scheme (NSFAS) will not charge interest on student loans until 12 months after graduation, Higher Education Minister Blade Nzimande said on Thursday.

This applied to NSFAS loans registered from April 1 this year.

Nzimande said NSFAS previously charged interest on student loans from the moment the loan was taken.

"This has resulted in students leaving university with unmanageable debts," he told reporters in parliament at a pre-budget vote briefing.

He said NSFAS was meant for "poor" students or students from "poor" households, and that charging interest on these students' loans from the start placed them in debt even before they began working.

Nzimande said R2.7bn was given to NSFAS in the previous financial year to assist students. This was increased to R5.4bn in this financial year.

He said that although the figure had doubled, the number of students receiving loans would not necessarily double, but would drastically increase.

Students who had completed their studies but who had not yet graduated or received their certificates because of outstanding fees with their institutions would also be able to apply to NSFAS for a further loan to settle payment.

NSFAS would receive R200m from the department to grant these loans.

"This will enable more than 25 000 students to receive their certificates and enter the job market."

Nzimande said R50m had also been provided for post-graduate students who required financial assistance to complete their degrees.

He said 63 000 students at further education and training colleges would also be able to access NSFAS loans.

In addition, the department had asked NSFAS to remove all students it had listed with credit bureaus.

He said some students were prevented from renting flats or buying vehicles they needed for work because they were blacklisted.

The department was also "engaging" with universities to remove students, especially NSFAS students, they had listed with credit bureaus.

Nzimande said this did not mean that graduates who had jobs could escape paying back their student loans.

The department would approach the SA Revenue Service to assist in "tracing and forcing" the students to pay, he said.

"We want to get back every cent that should be paid. It is indeed irresponsible not to pay. We are appealing too these people to pay."

 
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