Interaction with the Department of Higher Education, Universities South Africa, and SAPCO on the certification backlog in the PSET system

Video The Committee convened in Parliament to engage with the Department of Higher Education and Training, Universities South Africa, and the South African College Principals Organisation on the scope, causes, and proposed solutions to student debt and the associated withholding of academic certificates across universities and Technical and Vocational Education and Training colleges in the post-school education and training system. The Department commenced by providing context, noting that the Department had received persistent representations from graduates unable to access their qualifications because of outstanding historical debt, and that engagements with institutions had been ongoing for a number of years. It was reported that a formal legal opinion had been sought on whether the withholding of certificates was constitutionally permissible, with the assessment finding that while section 29(1)(b) of the Constitution governed further and higher education under the principle of progressive realisation, the practice caused severe prejudice and personal anxiety. They also flagged that the combined tuition and accommodation debt across universities had exceeded R45 billion, with gross university debt standing at R23 billion, framing what he described as a profound financial crisis in the sector. On the university sector, the Department's data covered the 2022 to 2024 period and showed gross institutional debt increasing to R24 billion, with impairment provisions rising to R15.3 billion and more than 165 000 academic certificates withheld. The presentation outlined the legal opinion on certificate withholding and identified the key structural drivers of the debt, which included the transition to the student-centred National Student Financial Aid Scheme (NSFAS) model from 2016 to 2017, unresolved reconciliation backlogs between institutions and NSFAS, the unilateral introduction of the student accommodation cap by NSFAS, and the systematic failure of students who lost NSFAS eligibility under the N-plus rule to self-fund their remaining studies. On the NSFAS dimension specifically, the Department explained that an allocation of approximately R967 million had been made by former Minister Naledi Pandor in 2019 to clear historical debt for students registered in 2018 under the pre-2018 loan model, and that the R29 billion currently reflected on institutional ledgers as NSFAS-linked debt largely represented unreconciled balances rather than confirmed irrecoverable amounts. The Department believed the actual net liability was lower than the stated figure, as several accounts had been progressively resolved since 2021. NSFAS added that as at the end of 2025, NSFAS estimated it owed universities and TVET colleges a combined R8 billion, that reconciliations for all 26 universities and all TVET colleges from 2017 to 2024 had been finalised on NSFAS's side, with only the University of Limpopo outstanding, and that the ball was now with institutions to review and sign off. He was candid that NSFAS did not have the reserves to settle the outstanding debt and warned that the scheme was structurally committing R8 to R10 billion more per year than it could afford, placing it on a trajectory comparable to the Road Accident Fund. Universities South Africa (USAf) presented a comprehensive institutional overview covering all 26 universities. The total sector debt reported by USAf stood at R59 billion, disaggregated as approximately R26 billion owed by self-funded students, R29 billion linked to NSFAS-funded students, and R12 billion classified as bad debt. Across the sector, 188 209 academic certificates were being withheld at the time of the presentation. The institutional table provided to the Committee included each university's total debt, the split between funding categories, irrecoverable debt provisions, and the number of certificates withheld per institution. However, a data accuracy concern was raised during the engagement when it emerged that two institutions, the University of Mpumalanga and the Vaal University of Technology, had been assigned identical total debt and mitigation figures of R218 651.97 across multiple rows of the spreadsheet, which USAf acknowledged as a copy-and-paste error that would be corrected. On the effectiveness of certificate withholding as a debt recovery mechanism, USAf acknowledged that debt had grown from approximately R16 billion in 2020 to R59 billion over six years, and conceded when pressed that the mechanism was yielding only minimal recovery, though they maintained that it served as the last available link between institutions and indebted graduates. Universities used a staged debt management approach, including signed acknowledgements of debt, cut-off thresholds at re-registration, and external debt collectors, before reaching the withholding of certificates as a final step. On the NSFAS accommodation cap specifically, USAf acknowledged that NSFAS had made a unilateral decision to introduce the cap without adequate prior engagement with institutions, that this had created debts that institutions had not projected, and that the problem had visibly worsened from 2023. He confirmed that USAf had met with NSFAS on the matter but that NSFAS had proceeded regardless. He noted that for a non-historically disadvantaged institution like the University of Cape Town (UCT), which operated on a full cost model without the same subsidy structure as other institutions, the gap between the NSFAS accommodation cap and actual residence fees was borne by students from households earning less than R350 000 per year. UCT's non-sharing room cost was cited at approximately R89 520, compared to R52 000 at a neighbouring institution, and its sharing room at R78 690 against R46 000 at a comparable institution nearby, illustrating the geographic and institutional cost differential the cap failed to address. USAf would support the Chairperson's structural proposal in principle and would happily relinquish certificate withholding if a more effective debt recovery mechanism linked to employment confirmation through the South African Revenue Service (SARS) were established. Total debt across technical and vocational education and training (TVET) colleges stood at R2.534 billion, affecting 466 469 students, with 20 950 certificates withheld. Provincial breakdowns were included in the presentation, with the debt concentrated in certain colleges facing particularly acute bad debt positions. Capricorn TVET College carried R242 million in outstanding debt and Nkangala TVET College R211 million. The bad debt crisis in the sector was severe, with several colleges reporting that between 80 and 100% of their debt was irrecoverable, a ratio that South African Public Colleges Organisation (SAPCO) and the Committee noted was effectively rendering those institutions unable to purchase current technology or maintain programme quality in their workshops. SAPCO's recommended interventions were also set out in the presentation, though the TVET data landscape was acknowledged as incomplete, with only 30 of 50 colleges having responded to the Department's information request. SAPCO argued that the solution framework agreed with universities was not directly transferable to TVET colleges for several structural reasons. TVET colleges had not received the R967 million historical debt relief that universities received in 2019 under Minister Pandor's intervention, despite facing the same NSFAS close-out backlog from 2017. Unlike universities, most TVET colleges were located in rural or semi-urban areas without the institutional capacity, financial aid offices, or connectivity infrastructure needed to manage complex debt recovery mechanisms independently. SAPCO's proposal was therefore direct: the Department or National Treasury should assume the R2.534 billion in TVET debt, releasing all 20 950 withheld certificates, with the debt then transferred to Treasury for recovery via SARS-linked employment tracking on the same basis as the proposal developed for universities. Members engaged extensively across several critical areas. On the reliability of the data before the Committee, Members challenged USAf on the identical figures appearing for the University of Mpumalanga and the Vaal University of Technology in both the debt totals and the mitigation measures columns, pressing for an immediate correction rather than a deferred response, and noting that when one institution's data was confirmed as inaccurate, the integrity of the entire dataset before the Committee was in question. USAf acknowledged the copy-and-paste error and committed to providing a corrected version. On the effectiveness of certificate withholding as a debt recovery mechanism, Members drove USAf toward a candid assessment of whether the mechanism was working at all, given that sector debt had risen from R16 billion in 2020 to R59 billion in 2026. After sustained engagement, USAf's Vice-Chancellor accepted that the overall success rate of debt recovery across all mechanisms was not at the desired level, and that a more nuanced and creative diagnostic approach was needed. Members also noted that using the Rhodes University case study, which showed R417 million in irrecoverable debt alongside a mitigation strategy that proposed strengthening the very mechanism already in use, the certificate withholding approach had demonstrably not delivered the desired results. Members raised the systemic and human dimensions of the certificate withholding practice with force. The Committee questioned whether the interim measure of issuing letters of completion was genuinely useful to graduates when major employers, including Parliament itself, required certified copies of qualification certificates and explicitly stated that applications without them would not be considered. The Committee also challenged the Department's own human resources (HR) practices as contradictory to the relief mechanisms it publicly endorsed. The emotional and psychosocial toll on graduates was raised directly, with the Committee eliciting the Director-General’s agreement that the withholding of certificates could be a contributing factor to student suicides. The Committee pressed the Department on the state of the missing middle loan scheme, noting that the R3.8 billion allocated by the National Skills Fund had reached only approximately 2 000 of the 32 000 applicants in the system, and called for a concrete policy implementation timeline. On accountability for the close-out project backlog, Members questioned who bore responsibility for the reconciliation failures dating to 2017 and why no one had been held to account, with the NSFAS Acting Chief Executive Officer (CEO) attributing the delays largely to chronic leadership instability at the scheme. The Committee also raised the 822 deceased students identified by the Auditor-General as receiving NSFAS funding in 2024-25 as evidence of an organised syndicate requiring urgent forensic investigation, proposing that SARS data be linked to the relevant NSFAS bank accounts and referred to a reputable forensic entity within a three-week turnaround. Key Committee Resolutions and Proposals The Committee resolved to request from USAf, in writing, a detailed breakdown of the R59 billion sector debt disaggregated by South African and international students, undergraduate and postgraduate levels, completion status, and number of certificates withheld per category, with the NSFAS-linked portion similarly disaggregated. The Committee also resolved that the Department must urgently develop and present a concrete implementation timeline and regulatory framework for the withholding and release of certificates, including draft amendments to the Higher Education Act and the NSFAS Act to close the identified policy gap. The Special Investigating Unit (SIU) close-out project, running from 2022 to 2023 and extended beyond its original 2024 deadline, was flagged for immediate escalation, with the Committee stating it would write to the Minister and directly to the SIU for a progress report, with escalation to the Presidency if the response was unsatisfactory. The Chairperson tabled two structural proposals on which provisional agreement was reached. The first was a pilot SARS-linked certificate release mechanism covering all graduates from 2020 to 2025 across all 26 universities, under which the Minister and Director-General would conclude a memorandum of understanding with National Treasury and SARS to release withheld certificates on the condition that SARS would notify the relevant institution upon confirmation of each graduate's employment, enabling repayment arrangements to be initiated without the current binary of withholding versus unconditional release. USAf indicated support for the spirit of the proposal, noting that a legislative amendment might be required and that National Treasury paying institutions up front, with recovery through SARS, could be explored for institutions in financial difficulty. The second proposal was that the Department, working with USAf, SAPCO, and the Department of Public Service and Administration, issue a formal directive to all government departments requiring that letters of completion from universities and TVET colleges be treated as equivalent to degree certificates for employment purposes in the interim, with corresponding private sector outreach through Business Unity South Africa. The Committee also resolved that institutions must allow indebted graduates to participate in graduation ceremonies, noting that some institutions were already doing so and requesting that USAf carry the resolution to all member executives. A joint colloquium on the student accommodation cap was proposed to address the NSFAS-USAf relationship impasse as a matter of urgency.