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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.