Learning from NSFAS: Strengthening Income-Contingent Loan Collection in South Africa

The financing of higher education in South Africa has faced persistent challenges, with NSFAS experiencing significant challenges in collecting repayments, threatening the sustainability of higher education funding. This study investigates the decline in NSFAS’s LCR between 1999 and 2018 and considers the possible mechanism that the proposed ICL system could implement to mitigate the challenges faced by NSFAS. The study examined NSFAS’s operations using a qualitative document analysis research design. Findings reveal that NSFAS experienced legislative and policy constraints, institutional capacity and operational weakness, as well as external economic factors that collectively limited recoveries and long-term viability. ICL implementation should be supported by legislative reforms, integration of repayment through SARS, and loan terms that balance affordability with fiscal sustainability. The study addresses a significant gap in research on student loan collection strategies within the South African context, offering a more integrated understanding of the factors influencing repayment. The results emphasise the need to align repayment mechanisms with prevailing economic conditions and legal frameworks to secure the long-term viability and effectiveness of the proposed ICL model.