Ramaphosa: New funding model being finalised for ‘missing middle’ as student debt tops R23bn

Government developing new funding model for “missing middle” students as debt climbs

President Cyril Ramaphosa told Parliament that government is working on a new student funding model aimed at the so-called “missing middle” students who do not qualify for the National Student Financial Aid Scheme (NSFAS) but who cannot fully fund their own tertiary studies. He made the announcement during a response to a parliamentary question on student debt.

What the president told MPs

Responding to a question from ANC MP Gaolatlhe David Kgabo in the National Assembly, Ramaphosa outlined past and current measures on student funding and debt relief. He said government had provided debt relief in 2019 for historical NSFAS debt amounting to R967 million, covering debt accumulated before the 2018 financial aid model change.

Ramaphosa noted that NSFAS currently supports close to 900,000 students annually from low-income and working-class families, and said students who apply on time and meet academic requirements should graduate without debt under the scheme describing this as free university and college education for qualifying students.

Rising university-held debt

The president warned that student debt carried by public universities has been rising and had reached approximately R23 billion in 2024. He said this debt is held by universities themselves and raised concerns about the financial sustainability of universities.

Long-term funding work underway

Ramaphosa said efforts to craft a long-term student funding solution have been ongoing for several years. He referred to a 2022 ministerial report in which a task team provided advice on developing a comprehensive student funding model.

He described the target group as a diverse set of self-funded students who either fall outside NSFAS financial eligibility or struggle to access other funding. The president said the department is finalising the model and expressed hope it would assist students who can afford some but not all of their educational costs.

Government aims and next steps

Ramaphosa said the government wants to reduce student debt substantially so that young people can access higher education on a fair basis. He noted the work on the new funding model is still underway and is in the process of being finalised by the department.

“This model would address financial aid for students who are considered to be in the so-called missing middle,” Ramaphosa said.

The president’s remarks came amid broader parliamentary discussion about innovative debt relief measures and the continued financial pressures facing higher education institutions.