Academics welcome student loans for ‘missing middle’

Experts believe a new loan plan announced by higher education minister Blade Nzimande will help students and parents who don’t qualify for the National Student Financial Aid Scheme (NSFAS). 

Nzimande announced on Sunday that at least half of an estimated 68,500 students in the “missing middle” category will be funded by the government with a new, comprehensive funding model.

The missing middle is defined as students who don’t qualify for funding because their household income is above the R350,000 per annum threshold, but for whom tertiary education remains unaffordable because their annual household income is less than R600,000.

Nzimande said the government set aside an initial R3.8bn to support such students — R1.5bn will be allocated from from the National Skills Fund and R2.3bn from Sector Education and Training Authorities (Setas). That would be sufficient to fund 47% of the missing middle students, or 31,884 of the estimated 68,446 total. 

Dr Muki Moeng, deputy vice-chancellor of teaching and learning at Nelson Mandela University, said the funding was a good idea, though she cautioned that sustainability of the funding was crucial.

“I think it is a good idea if repayment of the fund will be like the Tertiary Education Fund of SA while we were students. We were forced to pay back as soon as we were employed,” she said, adding that there ought to be a system to monitor and enforce repayment. 

“It will alleviate strain on parents. However, we need to make sure loans are repaid so we can give more loans to others. It will be sad if we say we going to implement this and then find it difficult to recoup the loans,” Moeng said. 

Prof Michael le Cordeur, vice-dean for teaching and learning at Stellenbosch University, said he believed the loan will help the missing middle.

“This has been a major problem for some time and is long overdue,” he said.

The application criteria for for the new study loan are: 

• students whose annual household income is between R350,000 and R600,000;
• TVET and public university students;
• undergraduate or postgraduate students;
• 70% of applicants will be taken from Stem (science, technology, engineering and mathematics) programmes; and
• student applicants must sign a loan agreement.

Students who need loans for ongoing studies must attain an average of 60% or higher. Their loan will cover tuition, learning material and accommodation, and those who complete their qualification in the prescribed time and obtain an average of 70% or higher will have 50% of their loan converted to a bursary on request.

Le Cordeur said students being taken from the Stem programmes will help reduce the high unemployment rate among youth because the programmes will help to train people for the future workforce. 

“Maths, technology and science will help to train skilled people for the future workforce which will undoubtedly feed into our economy,” he said. 

Moeng supported Le Cordeur’s view, indicating there was a need for graduates in Stem subjects.

“Stem subjects are important. A student who is qualified in Stem, whether employed in SA or internationally, those students are sought after,” she said. 

Speaking at the ministerial community education and training summit in March 2022, Nzimande said the country skills shortage was worsened by the ever-increasing number of people who are not in employment, education or training.

He highlighted key skills that are in demand, including the digital economy, infrastructure development, data scientists and computer networks. 

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