South African universities could turn to the South African Revenue Service (SARS) to help recover money owed by graduates as pressure mounts over unpaid student debt and delayed NSFAS payments.

Rhodes University’s Centre for Postgraduate Studies director Sioux McKenna has proposed stronger links between universities, the National Student Financial Aid Scheme (NSFAS) and SARS.

The idea would allow repayments to be deducted automatically once graduates enter the workforce, with the amount linked to what they earn.

Universities face billions in unpaid funds

Public universities are reportedly owed more than R10.5 billion by NSFAS.

Some institutions are carrying particularly large balances. The University of the Free State is reportedly owed about R1 billion, while North-West University is owed around R1.2 billion.

McKenna said delayed funding places pressure on universities and can ultimately affect students waiting for money for food and accommodation.

Institutions without large financial reserves are particularly vulnerable when payments are delayed.

SARS could automate repayments

McKenna said universities also struggle to recover outstanding fees from students who leave with unpaid balances.

She proposed an automatic system linked to SARS once graduates start earning.

Repayments could be proportional to income, meaning graduates earning more would contribute more towards their outstanding debt.

McKenna argued this would remove the need for former students to remember payments or establish their own debit orders and stop orders.

She said a stronger relationship with SARS could make the repayment process more reliable.

Broader NSFAS reform needed

McKenna warned that improved debt collection alone would not solve NSFAS’s wider problems.

She said the scheme now covers more than tuition, with funding also used for accommodation, food, books and other living expenses.

One possible reform would separate education funding from other forms of support. Tuition funding could go directly to students or universities, while other assistance could potentially fall under broader social grant mechanisms.

McKenna also raised concerns about the financial pressure facing universities as NSFAS funding grows relative to general government university funding.

She said automatic graduate repayments through SARS could address part of the problem, but argued that wider changes are needed to ensure NSFAS remains sustainable.