COSATU, EFF call on govt and banks to scrap student debt

Image credit: Twitter/COSATU

Trade union federation COSATU has called on the government, banks and institutions of higher learning to consider scrapping student debt for young people entering the job market.

In its Youth Day statement on Tuesday, COSATU said a significant number of young people enter the labour market with “an albatross of historical debt, largely acquired through student loans, around their necks.”

It added, “It is about time that commercial banks, government, and institutions of higher learning review and consider the cancellation of academic loans for new workers entering the labour market and all those who are sitting at home.”

The federation further said the Youth Employment Scheme (YES) and Employment Tax Incentive Scheme (Youth Wage Subsidy) have “both failed to deliver the required results in terms of youth unemployment alleviation.”

It called for a review of both schemes, adding, “We need a report on the funds allocated/ tax relief schemes for companies versus the number of employment and learning opportunities created for young workers.”

EFF makes the same call

In his Youth Day address, Economic Freedom Fighters (EFF) leader Julius Malema similarly called for cancellation of student debt.

“Cancel all student debt and reintegrate all students who were excluded on the basis of finance. Further, all institutions must issue degrees and certificates that have been withheld on the basis of non-payment of fees,” Malema said.

Mandla Shikwambana, President of the EFF Student Command, went further to call for the resignation of Higher Education Minister Dr Blade Nzimande and National Student Financial Aid Scheme (NSFAS) Administrator Dr Randall Carolissen for having “failed black students.”

Debt cancellation ‘will cause strain’

In January, Universities South Africa (USAF) chief executive Professor Ahmed Bawa said the government could not afford to cancel historic student debt.

He explained, “The issue of historic debt is one that is not going to be resolved easily, as the historic debt at the moment of non-NSFAS-funded students is in the region of R9 billion.

“If that amount is wiped out without some sort of rational solution to it, what it would mean is that money owed to universities for maintenance, infrastructure development and improving the quality of the classrooms begins to be undermined.”

Bawa added that the government allocated NSFAS R967 million last year to clear debt owed by NSFAS-funded students.

Last week, Nzimande denied a claim made by the Democratic Alliance (DA) that NSFAS was “writing off” R1.96 billion of student debt.

“I would also like to respond to the absurd allegations from the DA that NSFAS is going to be writing off the student historic debt. I don’t know where they take this from,” he said.

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