Unlocking Futures: Rhodes University launches debt relief campaign

Concern is palpable at Rhodes University as the institution grapples with escalating student debt. The university is not alone in this struggle. Many others in the country face similar uncertainty following the decision by the National Student Financial Aid Scheme (NSFAS) to cap funding allowances for students. The move has had a dire impact on students and fee-payers and has forced higher educational institutions to reprioritise spending. Students have had to cut back even further on food and other essentials, while many will enter the working world already on the back foot with hefty debt bills.

NSFAS recently implemented several changes to its funding model, including stricter academic requirements for students to continue receiving funding. As of 2024, continuing and first-time entering students must achieve a credit pass rate of 50% and a course credit pass mark of 60% to be eligible for funding.

Living allowances have been capped at R16 500 per annum, and accommodation fees have been restricted to R50 000 in metro areas and R41 000 in other regions per academic year. Despite being classified in the lower accommodation funding category, Rhodes University’s average residence fees significantly surpass the capped amounts set by NSFAS.

The capping of funds for accommodation is hurting institutions, which are doing their utmost to mitigate the impact of the shortfall. According to Universities South Africa, student debt has accumulated over R700 million in 2023 alone. The body, representing 26 public universities in the country, says this amount reflects the difference between what universities charge students for accommodation and food compared to the amount NSFAS pays.

At Rhodes University alone, R43 million is owed to the university in outstanding student debt due to the cap in funding in only one year. Chief financial officer Kamlesh Riga says 3 522 of the 8 156 students registered at the university for 2024 are funded by NSFAS, with 67% of students living at the university’s residences reliant on NSFAS to pay for their accommodation.

While Rhodes University’s outstanding student debt is R321 million, it is far less than the national student debt figure of R17 billion. Through various fundraising initiatives, the university aims to provide debt relief and increase student access to higher education.

The funding shortfall has led to the university cutting back on its operational spending. “We have a backlog in maintenance on our infrastructure that runs into billions. We normally aim to upgrade at least one residential building on campus annually. Reprioritisation of maintenance needs will now have to be performed,” says Riga. “Funding of research equipment, new and replacement, could also drop down the priority list. If we don’t have surplus funds that we can reinvest, this will affect our operations in the medium- to longer term. In the long term, the university’s financial sustainability will be at risk.”

Despite efforts to extend registration dates and accommodate struggling students, intake numbers have dropped this year, exacerbating an already precarious financial situation. If NSFAS continues this trajectory, more young people may think twice about enrolling at university for fear of mounting bills. “No one wants to enter the work environment with thousands of rands in debt hanging over their heads.” He adds that in some cases, students may enrol at Rhodes University, but be forced to consider cheap accommodation that may not support their academic success.

The university has launched a campaign, “Unlocking Futures”, to alleviate student debt. The immediate goal is to raise R74 million to lessen the financial burden on current students and graduates. As Rhodes University celebrates its 120th anniversary this year, the institution is calling on all stakeholders to rally behind the initiative, to empower the next generation of leaders and to forge a path toward a brighter, more equitable future for students in need of funding.

Image credit: Freepik