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The Skyrocketing cost of living exacerbated by the recent fuel price increase and e-tolling has placed several high-profile former model C schools in a precarious financial position.

Parents even solidly middle class families are finding it increasingly difficult to pay school fees for a term in advance as is required by many schools.

Fred Steffers managing director of payments System Company PS&S said it was evident from ongoing conversations he was having with school principals and governing bodies that many schools were feeling the financial pinch.

"Fee-paying schools" have a very limited number of options for collecting outstanding fees. The overwhelming majority of them are bending over backwards to try and accommodate hard pressed parents who are batteling to pay but ultimately they have to resort to debt collectors or Credit Controllers. That's where we as a company (ECCM) are able to help schools. We can collect and manage these accounts and collect the revenue of the arrear school fees.

The latest report released by discovery shows that parents with a child starting Grade 1 at a private school this year will have to budget more that R1 million to put that child through their entire schooling career shows clearly the challanges that parents are facing. 

Consumers and especially parents of children at fee-paying schools are under huge financial pressure.

According to figures from Statistics SA, parents who have children this year should expect to pay more than R1.1m for education fromo Primary to Tertiary schooling. This is over R300 000.00 more than it cost for children born five years ago. 

School dropout rate increasing significantly:

A shocking 40% of South African students drop-out of university in their first year, a major study has found. Financial difficulties amoung the country's large pool of poor students are, unsurprisingly, largely to blame first generation students from low-income, less educated families are the most likely to drop out. 

The student pathways study by the Human Sciences Research Council also found that on average only 15% of students finish their degrees in the allotted time. High student  drop-out and failure rates are a major problem in a country with limited state resources, a desperate shortage of high level skills and a pressing need to raise income levels amoung the poor.

While South Africa has a highly successful National Student Financial Aid Scheme, which supports about 120 000 of 735 000 university students, loans and bursaries do not cover the full costs of study, leaving poor students struggling to meet living and other expenses. 

Lack of finance emerged as the major impediment for students, this was to be expected considering that on average their monthly family income was between R400 and R1600. Around 70% indicated that they had no siblings with university experience, which suggests that they are first-generation university students in their families.  Financial difficulties had compelled most of the students who dropped out to take up a part-time or full-time job, while this was necessary in order to augment their meagre financial resources, there is no doubt that juggling study and worked proved to be another reason for not focusing on studies. 

Why students leave: The problem of high university drop-out rates sought to understand factors influencing the pathways of students through universities into the labour market. The researchers traced 2000-02 cohort of students who dropped out or graduated from seven very different intitutions around the country. They drew on data from the Education Department, institutional reports, qualitative interviews with academics and managers, and a postal survey of 34000 respondents. Of these, 20 000 had abandoned their studies and 14 000 had graduated. The return rate was 16%, or some 54000 former students.

The study found that amoung students who dropped out from the seven universities, on average 70% came from low-income families. This proportion rose to 82% at the historically disadvntaged university of Fort Hare. Low family income generally equated with lack of formal education.

Black Africans comprised the largest proportion of students with low socio-economic status. While 73% of black students were from low income families, only 12% of white students were and , conversely, only 9% of black but 47% of white students were from families with high incomes.

Universities are struggling to solve the drop-out problem, given its largely financial basis, but have called on government to raise student loans and bursaries to relieve the financial pressures on needy students. In the past decade, many institutions have also introduced academic support systems for students from sub-standard schools.

Earlier this month the distance University of South Africa (UNISA) announced it would spend nearly R50 million to establish a comprehensive network of tutors and academic support personnel across the country, in an effort to decrease drop-out and failure rates.