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    Investing in our future: Acting boldly to bridge South Africa’s skills and funding gaps

    South Africa’s students are grappling with a harsh reality. Many lack the funds necessary to pursue tertiary education, which denies them the opportunities education offers. Those who manage to enroll often find themselves burdened by crippling debt. Even students who receive funding are frequently compelled to send money back home to support their families, leaving them financially vulnerable and at risk of dropping out.
    Dr Retha Langa, group head: strategic communications and partnerships, NetEd Group
    Dr Retha Langa, group head: strategic communications and partnerships, NetEd Group

    As South Africa’s student funding crisis hits a tipping point, the skills gap threatens to widen even further. In March 2022, Universities South Africa revealed that student debt had ballooned to R16.5bn, a figure that has continued to rise. This burden weighs not only on students but also on universities, draining resources from vital academic programmes. The inability to pay tuition has escalated into a national emergency, trapping young talent in a cycle of poverty. Institutions like NSFAS and the SETAs - established to make a difference - are mostly crippled by inefficiency and corruption. The result? A generation locked out of the socio-economic mobility promised by higher education, and a nation on the brink of losing its future workforce.

    Youth unemployment has reached alarming heights - sitting at a staggering 46.6% - with no relief in sight unless bold, systemic reforms are made. Yet, within this crisis lies an opportunity. Skills are the great equaliser, levelling the playing field and unlocking better economic outcomes. Given the high levels of trust in business - according to the Edelman Trust Barometer, business is consistently viewed as more ethical and competent than government - what role can the private sector play in reversing these trends?

    For student funding to drive real change, we must move beyond compliance-driven approaches and reimagine it as a strategic investment in the country’s future. The solution to the crisis isn’t simply about spending more - it’s about spending smarter. There is much we can learn from the innovative approaches other countries have adopted. Efficient, accountable use of funds - directing investments toward targeted programmes with proven results and measuring impact - is essential. This must go hand in hand with a holistic approach that pairs financial aid with wraparound services such as mental health support, academic tutoring, and employability training. A similar approach has proven effective in countries like Chile, where vocational institutions closely align loans with employability outcomes, ensuring students are positioned for success.

    Another innovation is Income Share Agreements (ISAs), where students repay a fixed percentage of their future income, which has successfully expanded access to education in regions such as Latin America. Brazil’s Ideal Invest model, where universities share the risk and support student loans by subsidising interest rates, has not only boosted enrolment but also reduced defaults. Locally, several funding providers have developed sustainable, low-interest loans, backed by diverse strategies to ensure collectability - demonstrating the importance of tailoring solutions to local contexts.

    A siloed approach to closing the skills and student funding gaps is no longer sustainable – it is in fact a subject worthy of being on the agenda of the envisaged national dialogue. Government, civil society, the private sector, and both public and private higher education institutions must come together to co-create solutions.

    By embracing a spirit of collaboration and adopting innovative finance solutions, we can transform bursaries and scholarships into strategic investments that pay dividends for students, businesses, and society. Together, we can shift the course of South Africa’s education crisis. The time for fragmented, half-hearted efforts is over. Now is the moment for bold, decisive, and collective action to bridge the skills gap, futureproof our country’s workforce, and pave the way for a more inclusive and prosperous future.

    The NetEd Group, a leading private higher education platform serving over 17,000 students, believes quality, relevant and accessible education holds the key to unlocking Africa’s boundless potential. Eduvos forms part of the NetEd Group.

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