The South African Bill of Rights determines that "Everyone has the right ¬ to a basic education ... and to further education, which the state, through reasonable measures, must make progressively available and accessible." It does not guarantee this to be free, but provides for access to education as a fundamental human right.
A recent study by The Human Sciences Research Council revealed that many students at South African tertiary institutions were from very poor homes with combined household incomes as low as under R1 600 per month - some even as low as R400 per month. Many of these are students with the capacity to complete their studies and make a contribution towards the development of the country and its people.
At the same time tertiary institutions battle massive debt burdens, often due to the very same reason. Although university debts certainly cannot only be ascribed to the inability of less affluent students to pay their study and accommodation fees, this undoubtedly contributes to the dilemma. Any solution that will enable more students to financially afford their studies over the longer term will go a long way towards easing the cash crunch in education for all.
Add to this already bleak picture the fact that many non-residential students cannot focus on their studies because they cannot feed themselves, and the high drop-out rate gains a new dimension. Many of these students take part-time jobs to supplement their meager income, placing even further strain on their ability to complete their studies.
And the picture is set to become worse: with rampant inflation and rising costs in all spheres of life it speaks for itself that study fees are likely to continue rising for some time to come. Like any other service, these fees are directly affected by rising food and commodity prices, rising fuel costs and the worsening value of the Rand against foreign currencies.
Since its inception 11 years ago, Edu-Loan has made more than R1.1 billion available to more than 350 000 learners in the form of education finance. In compliance with the National Credit Act, Edu-Loan will only consider loans if applicants can show that they have a disposable income of not less than 25% of their basic pay after deduction of their educational loan repayments, bills, housing, car payments, etc. This also gives employers the peace of mind that employees will still be able to afford a reasonable lifestyle in spite of their educational loan obligations.
Corporate South Africa can make a significant contribution to overcoming the educational dilemma by offering their employees payroll deduction facilities for their children's educational loans. As part of a comprehensive social responsibility programme this can be supplemented with life skills training for employees to empower them with the necessary skills to do simple financial planning, budgeting and cash-flow management. Several companies have implemented study loan subsidy schemes in deserving cases. All of this will enable lending institutions to improve their loan recovery ratios, thereby freeing more funds for further loans.
Edu-Loan targets in particular students who do not qualify for traditional financing through the formal banking sector or government aid schemes. They also cater for students with debts, providing financial assistance through a creative outstanding debt programme. Education loans are intended to cover tuition and accommodation fees, and study materials such as books.
"Education must become accessible to all South Africans if we want to see our country grow and compete in the global economy," says Acting CEO of Edu-Loan, Johan Wasserfall, "and we all have a huge role to play in achieving this".
ENDS
Issued by:
InZalo Communications
Sharon Piehl
011 646 992 / 082 600 0138
On behalf of:
Edu-Loan
011 670 6100
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