With some school fees set to rise by more than twice the inflation rate, a growing number of middle-class parents will not be able to afford the costs of education in 2020.

Speaking to the Sunday Times, governing body representatives said that fee exemptions and nonpayment cost hundreds of schools a large chunk of their income last year, with the situation expected to worsen in 2020.

A student may qualify for a fee exemption if the fees are more than 10% of both parents’ combined annual salary.

Chief executive at the Federation of Governing Bodies of South African Schools, Paul Colditz said two-thirds of its 2,033 member schools that charged fees are losing 22% of income on average, either through fee exemptions or nonpayment.

“A larger percentage of middle-class families who normally would not have qualified for an exemption now do qualify either because the wife or husband has lost their job,” he said.

However, he said that the increase in school fees is understandable as the government was not fully covering the cost of fee exemptions.

“We’ve had fee exemptions of R1 million being granted and the school gets R30,000 in compensation.”

Goolam Ballim, chief economist at Standard Bank, said that a preliminary analysis of household finances showed a rise in defaulting parents from private and public schools.

Lebogang Montjane, executive director of the 844-member Independent Schools Association of Southern Africa (Isasa), indicated that this has led to a clear decline in the number of students attending schools with higher fees.

“Between 2017 and 2019, the number of pupils attending Isasa member schools that charged fees ranging from R20,000 to more than R100,000 dropped from 107,064 to 104,585.”

Massive debt problem

Middle-class South Africans are also struggling to make other payments, and the lack of end-of-year bonuses and wage stagnation means that many people are borrowing to pay for necessities such as food and transport.

Recent data from the National Credit Regulator (NCR) shows that 84% of those who earn R15,000 a month or more have some form of debt. The average middle-income salary is R20,000.

The latest DebtBusters quarterly debt report showed that South African consumers’ debt compared to what they earn has increased greatly over the past four years, reaching new highs in the third quarter of 2019.

The report found that at 117%, the ratio of debt to net income among DebtBusters’ clients in Q3 2019 is the highest it has been during the last four years.

For some income levels, the debt to income ratio is as high as 135% (those earning more than R20,000 a month). Just last year, the same ratio was 109%.

“The debt-to-income ratio has gone up massively over the last few years and this is particularly concerning ahead of the festive season, when we know people are under the pressure to spend more,” said Benay Sager, DebtBusters’ chief operating officer.

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