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Cosatu calls on govt to support cancellation of student debt for workers

The trade union federation's reasoning is that a large number of young workers enter the labour market already heavily indebted, largely due to student loans.

Picture: 123rf.com

JOHANNESBURG - The Congress of South African Trade Unions (Cosatu) has called on government to support the push for the cancellation of student debt for workers and graduates who are haunted by liabilities post their tertiary studies.

The trade union federation's reasoning is that a large number of young workers enter the labour market already heavily indebted, largely due to student loans.

A significant number of South African higher education students rely on funding models such as credit from banks, education loans and the National Student Financial Aid Scheme, which have to be paid back upon graduation.

Cosatu said that the COVID-19 lockdown had deepened the financial stress faced by many workers who already had impaired credit records as they were unable to repay their debts on time.

Among these people are young workers who the federation said would be displaced from their jobs due to retrenchments and may resort to self-employment, which requires seed capital they cannot access due to historical student debts.

This, in turn, perpetuates the vicious cycle of poverty that many black people find themselves in as a legacy of apartheid.

Cosatu wants the government to intervene in the matter by urging higher learning institutions to cancel academic loans for new workers entering the labour markets and graduates who are sitting at home waiting on jobs.

Another impact the federation mentions is that of the economy, arguing that most of the income earned by young people is used to survive debt, reducing the purchasing power of many workers.