Unpaid Debt Crisis: Everything You Need To Know
As the 2025 academic year kicks off, thousands of students across South Africa are finding themselves unable to register due to mounting student debt. The National Student Financial Aid Scheme (NSFAS), which is supposed to support financially disadvantaged students, has left many in limbo, unable to continue their studies or even obtain their qualification certificates. With rising unemployment and universities withholding degrees over unpaid fees, the student debt crisis is rapidly becoming an economic disaster.
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Thousands of Students Unable to Register
More than 120,000 students have been denied registration for the 2025 academic year due to unpaid fees. Institutions like Tshwane University of Technology (TUT) have reported alarming numbers, with over 63,000 students still in debt.
Many of these students were NSFAS beneficiaries who assumed their tuition and accommodation costs were covered. However, administrative issues and funding shortfalls have left them owing thousands to universities, forcing some to abandon their studies altogether.
In total, more than 720,000 students across South Africa are burdened with student debt, creating a financial deadlock that prevents them from either registering or graduating.
Graduates Stuck Without Certificates
The crisis doesn’t only affect current students. Graduates who completed their studies but have outstanding fees are unable to obtain their qualification certificates, making it impossible for them to secure jobs.
Palesa Legodi, a graduate of Tshwane University of Technology (TUT), shared her frustration:
“It’s been a year since I graduated, but I still haven’t received my qualification certificate due to outstanding fees. Despite being an NSFAS beneficiary, I still owe R30,000 to the university. As an unemployed graduate, I have no means to pay it back. What’s worse is that many job applications require me to submit my certificate.”
Thobile Mnguni, another affected graduate, voiced similar concerns:
“I’m severely impacted by NSFAS’s failure to settle my fees. As a graduate, I can’t apply for jobs without my qualification certificate. I’ve tried contacting NSFAS and student leaders, but I’ve had no success. It feels like my three years of hard work were for nothing.”
Current Students at Risk of Dropping Out
For students still enrolled, the financial strain is unbearable. Lindokuhle Shezi, a third-year student at TUT, is struggling to register due to an R87,000 debt.
“To register for my third year, I need to settle at least 10% of my outstanding fees, but I simply can’t afford it. The registration deadline is approaching, and I don’t know what to do. I’ve even turned to social media for help.”
With so many students in a similar situation, fears of an increased dropout rate are growing. Without urgent intervention, thousands may be forced to abandon their education, worsening South Africa’s already high unemployment rate.
A Growing Economic Crisis
The NSFAS debt crisis is no longer just an education issue—it’s an economic disaster in the making.
In 2024, former Higher Education Minister Blade Nzimande revealed that over 600,000 students were unable to receive their graduation certificates due to R5.8 billion in unpaid fees. This situation has only worsened in 2025, with even more students facing academic exclusion.
With South Africa’s unemployment rate already among the highest in the world, keeping young graduates out of the workforce due to unpaid university fees is a major setback for the country’s economic recovery.
NSFAS Response: Is There a Solution?
NSFAS spokesperson Ishmael Mnisi acknowledged the issue, explaining that the organisation is working on a reconciliation process to ensure all student accounts are correctly updated.
“NSFAS makes a final disbursement in November after reconciling student accounts. If funding was mistakenly omitted, an upfront payment is made based on the registration data received from institutions. However, students must meet academic eligibility to continue receiving funding.”
For students who no longer qualify for NSFAS bursaries, the organisation offers a loan scheme under the Comprehensive Funding Model by the Department of Higher Education and Training (DHET). This allows students whose parents earn between R350,000 and R600,000 per annum to access additional funding.
Despite these measures, affected students argue that NSFAS has failed them, leaving them in financial distress with limited options.
No Comment from Universities
IOL reached out to Tshwane University of Technology (TUT) to ask whether they have any initiatives to assist students struggling with unpaid fees. However, the university chose not to respond.
This lack of response has fueled frustrations, as students feel abandoned by both NSFAS and their institutions.
What’s Next for Struggling Students?
The NSFAS crisis continues to leave thousands of students stranded, unable to move forward with their education or careers. Without urgent action from the government and universities, the student debt crisis will deepen, locking even more young South Africans out of the job market.
With registration deadlines looming, students are left with two choices: find alternative ways to settle their debt or risk losing their education altogether. Will the government step in before it’s too late?
