ON THE MONEY
STUART THEOBALD: University funding needs concerted effort by banks, government and other players
Income-contingent loan model may be a pipe-dream. South Africa’s political zeitgeist is not conducive to finding good private sector solutions to public problems
What role should banks play in funding university education? The #FeesMustFall movement, in as much as it has a consolidated view on anything, says none. The banks themselves are noncommittal. Yet the Heher commission of inquiry report, which has been much commented on but little read, says they should have a central role. Could it really be true that the much-maligned banks could be the source of a solution to a serious social problem? I think so, but let’s not stop at the banks. Let the whole of the private sector come up with ways to lend to students, supported by a government-backed, risk-mitigation scheme. The report advocates for an "income-contingent loan scheme".Heher’s vision, while hedged with calls for further research and development, is of a public-private partnership through which banks make loans to students, then rely on the government to purchase the loans and collect them through salary deductions managed by the South African Revenue Service. The positive in this v...
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