“Student debt remains a huge challenge,” writes Mr. Mahlangu, the former Chief Financial Officer of the University of KwaZulu-Natal (UKZN), in his 2013 Annual Report. Over a decade and three CFOs later total outstanding student debt at that institution has nearly tripled, rising from over R700 million to close to R2.5 billion. Despite this, an almost identical line appears in the 2024 Annual Report[1], acknowledging that student debt “continues to be a challenge”.

The figure above not only shows this explosion in student debt at UKZN, but also that the University has firmly put any hopes of recovering it to bed. Expected Credit Losses (ECL), which indicates the portion of outstanding debt unlikely to ever be collected, has risen hand-in-hand and in 2024 was at 93% of outstanding student debt; a far cry from the 43% in 2013. The University has learned: student debts are not collected.

UKZN is far from the only South African university facing this predicament although its position is particularly precarious. The data for the Cape Peninsula University of Technology (CPUT) paints a familiar, but nuanced, picture[2]. We see the same meteoric rise in student debt (without the plateauing of UKZN) but a more optimistic assessment of recovering debt. ECL sits at 66% of total outstanding debt in 2024 – down from 72% in 2013.

These are but two of the worst examples of our public universities being unable to collect student debts.

The chart below shows a snapshot of student debt for the top 10 universities ranked by total outstanding debt. Each bar represents the total outstanding student debt per university split into ECL (shaded in yellow) and the outstanding debt that is expected to be collected from students (shaded in maroon). Taken together, the total student debt amounts to almost R14.5 billion for these institutions. Notable by its absence is any reporting of the number of affected students (as opposed to the Rand value).

Aside from the troubling quantum of outstanding debt, the chart also highlights large differences in how much universities expect to recover. For instance, UKZN expects to collect only 6.5% of outstanding debt while UCT expects to collect 58%.

These differences could reflect different accounting protocols and write off policies. Given that National Treasury is the ultimate guarantor of the financial health of these institutions perhaps there should be clearer accounting, debt management and disclosure guidelines.

Alternatively, universities may have very different collections capabilities which in turn impact on student incentives or willingness to repay.

A third possibility is that universities have different expectations about whether their graduates will find jobs and be able to pay back what they owe. If this is the case, perhaps universities should share this assessment with students before they enrol.

Irrespective, the data highlights a significant funding challenge that is unlikely to resolve itself. Perhaps it is time for institutions to abandon the fiction of student debt.