As students finish sitting for rewrites and supplementary exams and pass them – clearing the last requirement between themselves and a qualification – many are about to discover that finishing is not the same as being free to move on. Sphiwe Masuku, Head of Marketing at Fundi, explains.
With tens of thousands of completed qualifications currently being withheld by universities over unpaid fees, work-ready graduates are being held back from a labour market that is importing the very skills they have. “The overall impact beyond youth unemployment figures and scarce skills extends to individual lives and long-term future uncertainty,” explains Masuku.
To give this context, the Tshwane University of Technology alone is holding back more than 24 000 certificates; the Durban University of Technology over 23 000; and the Cape Peninsula University of Technology more than 16 000. “These aren’t students who failed or dropped out,” states Masuku. “They have met every academic requirement and cannot collect the document that proves it, because an outstanding balance stands in the way.”
She adds that the balances are a symptom of a larger strain on the sector: “In May this year, Universities South Africa shared with Parliament’s Portfolio Committee on Higher Education that outstanding debt across the post-school system had reached R59bn. Of this, R29bn is owed by NSFAS-funded students, R26bn by self-funded students, and about R12bn is already classified as ‘irrecoverable’.”
The Department of Higher Education and Training has additionally reported that the country’s 26 universities were owed R24bn by the end of 2024: close to two-thirds of it impaired. Given that institutions are dependent on fee income to remain solvent, they have responded by tightening registration rules and withholding certificates, transcripts and results until debts are paid.
Masuku explains that this results in a “closed loop”: “Without a certificate, a graduate cannot secure the professional employment that would allow repayment. They cannot register with a statutory professional body and can’t progress to a further qualification. In this way, withholding the documents actually removes the graduate’s only way of settling the debt the practice is meant to recover. They are unable to get employed.”
What makes this reality the most sobering perhaps is that the amounts involved are usually comparatively modest: in many cases less than a single month of a graduate salary. “In the context of these students, this is enough to halt a career before it starts.”
Fundi’s experience has shown that the problem is most concentrated in the “missing middle”: households that earn too much to qualify for full state support through NSFAS and too little to absorb a funding shortfall. “Over three decades of financing education, Fundi has watched this group grow, and with it a cohort of graduates who complete their studies but cannot move forward because of unpaid balances. Our response has been to provide a solution to help consolidate and pay off this debt – through a loan that settles this outstanding balance, enabling students to qualify.”
She adds that the cost to the wider economy is measurable, because South Africa’s constraint is increasingly a shortage of skills rather than of posts. Xpatweb’s 2025 Critical Skills Survey found that 84% of large corporations struggle to source highly skilled staff, with the proportion of employers unable to find engineers rising from about 23% to 38% in a single year, and those unable to fill artisan roles more than doubling from 10% to 22%.
Like many others, Masuku maintains that the problem is one of misalignment rather than availability in many instances: “South Africa is currently recruiting engineers, accountants and IT specialists on critical-skills visas while comparable, locally qualified graduates are being kept out of the labour market – not by any deficit in capability, but by an outstanding balance. This should give us pause.”
She notes that this skills mismatch is becoming more pronounced at a time when the entry point to skilled work is itself under pressure. With international research linking a contraction in junior hiring to the adoption of generative AI (a Harvard working paper records a sharp fall in entry-level appointments at firms deploying the technology since 2023, and a GMAC survey of more than 600 recruiters found roughly a third of employers replacing junior roles with AI, rising to 40% in the technology sector), comparable South African data is limited and the local effect remains uncertain. “The reality is undeniable however: a graduate delayed by two or three years risks re-entering a market in which the entry-level roles they trained for have thinned.”
With youth unemployment levels and scarce skills gaps shaping future realities for all of us, withholding qualifications from the people best placed to repay outstanding fees remains “necessary” but counter-intuitive. “A meaningful pool of scarce, work-ready skills is being kept out of the labour market by balances that alternative targeted funding interventions can clear. We need to find a way to make these more broadly available,” concludes Masuku.
