Cape Town - Higher Education and Training Minister Blade Nzimande said his department was engaging with the banks over the loan scheme that will finance those students commonly known as the “missing middle”.
This comes after a ministerial task team recommended that the government should explore the establishment of a loan scheme to support “missing middle” students in accessing higher education and training.
The task team had also recommended that in the immediate short-term the government should explore the possibility of a government guarantee for commercial bank loans.
The government guarantee will allow for the funding of “missing middle” students and test the take-up of such loans while other loan models were explored from 2023 onwards.
“The department is currently engaging with the banking sector to explore the options for a credit guarantee model with the commercial banks and other financial service providers before an application for a credit guarantee can be submitted to the National Treasury by the minister.
“It is envisaged that the final model will be tabled before the Forum of South African Directors-General before it is submitted to cabinet within the next month or two,” Nzimande said.
He made the statement when he was responding to parliamentary questions from EFF MP Naledi Chirwa, who asked about the urgent steps he has taken to resolve the financial exclusion crisis faced by thousands of students.
In his reply, Nzimande said he has had various consultations with universities, the South African Union of Students and National Student Financial Aid Scheme to address the issue of financial exclusions and historic debt of academically deserving students.
He said the department had also embarked on oversight visits to all 26 universities to determine plans that the institutions have put in place to assist unfunded students that are doing well academically and concessions that are in place to enable students with debt to be able to register.
“Most universities have initiated processes and concessions to assist academically deserving students.
“These plans and concessions range from SRC-raised funds to academically deserving students by settling their historic debt; merit bursaries to academically performing students; missing middle campaigns; and fundraising initiatives to assist academically deserving students, including fundraising engagements with external sponsors; and the signing of acknowledgement of debt forms in line with universities’ financial concessions.”
Cape Times