Students joining the newly employed are knee deep in loans.
GRADUATES who have recently joined the ranks of employment are drowning in debt. Some say they are “knee deep” in student loans and are “struggling to pay back the money”.
Students who failed to qualify for bursaries to fund their tertiary education are often left with no choice but to seek bank loans or apply to the National Student Financial Aid Scheme (NSFAS).
The Cape Argus spoke to four graduates yesterday who have all started their working lives with soaring bills, including tuition fees.
24 Year Old Accounting Graduate
A 24-year-old Cape Peninsula University of Technology (CPUT) Accounting graduate said she owed NSFAS R170 000. She graduated last year. She secured a permanent position as a junior administrator last month, and has been repaying her loan at R300 a month. At that rate, paying off a R170 000 loan would take 47 years.
“I only pay it so that they don’t blacklist me. I don’t even think it’s even possible to pay it off – it is just too much. It will never be cleared.”
To date, she has only repaid R1 000.
“Knowing that you have such a huge outstanding loan depresses you. I would like to do more at home but this diminishes your affordability.“
Apart from servicing her student loan, the accounting graduate has other monthly costs.
“I have to contribute R1 000 each month for groceries at home and pay for transport and toiletries for my two sisters back at home, which totals about R900.”
She lives in a flat in Bellville and pays R2 600 rent, transport to and from work costs about R500 a month, and her groceries and cellphone contract set her back an additional R400.
“I am too scared to open accounts for clothing, cars or even future bonds because I know that the NSFAS loan will pop up when they check my credit record.”
The accounting graduate spoke of an incident where she applied for a job at a bank. When her credit score was checked, the loan appeared.
“In the field that I am in you have to be screened,” she said.
28 Year Old Mechanical Engineering Graduate
Ofentse Mokoena, 28, graduated from CPUT with a mechanical engineering degree. Although he has not secured a permanent job, he was employed as a contract worker at an auto gas company. He owes NSFAS R56 000 and said he had not yet received letters demanding payment.
Mokoena graduated in 2012 and saved up his earnings from in-service training to pay for his B Tech fees last year. With his R6 000 monthly income, he has to send money home, pay rent, buy groceries and foot his commuting bill.
“I have to make sure that everything at home in North West is okay and that my mother does not need anything for my two siblings who are still at school. Even keeping back R1 000 for myself sometimes seems like a selfish act.”
When Mokoene obtains a permanent job he will have to make payment arrangements with NSFAS officials.
He said: “They have not yet harassed me because I’m not permanently employed, but my brother who graduated a few years ago used to be harassed for not making payments, even though it was difficult for him to do so.”
Mokoene said when applying for financial aid, payment details were not clearly explained to students.
“When we signed up for financial aid, we never knew that it could be such a problem and hinder our credit record – we were desperate.”
27 Year Old Mechanical Engineering Student
Mduduzi Buthelezi, 27, another CPUT mechanical engineering student, said he was happy to pay back the loan and saw it as a way of ensuring that other students received funding.
“It should be our way of saying thank you; we have our diplomas and should meet our end of the deal.”
Buthelezi owes NSFAS close to R20 000 and repays it in R1 000 monthly instalments. He was fortunate to obtain a permanent post at a prominent oil and gas company. He earns about R15 000 a month. This year, he registered at UCT to complete his degree. He decided to take out a bank loan, which he services with monthly instalments of R1 000. Buthelezi sees himself paying off his financial aid loan in the next two years.
23 Year Old Drama Student
Elizabeth Akudugu, 23, a third year UCT drama student is already worrying about education loan repayments. Her father took out an education loan at Standard Bank. The loan was for R100 250 for which he pays R6 000 a month, in addition to last year’s tuition costs of R123 033. Akudugu said she worried about the financial strain her education was putting on her father, and planned to take over the repayments after graduating.
“It’s hard to know that your parents are in debt and I try not to think about it and focus on getting good results.”