What to do if you want to study further but don’t know how to fund it

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Studying is expensive but help is available.
Studying is expensive but help is available.
Virojt Changyencham/Getty Images

Every parent dreams of giving their children the best education possible, equipping them with a solid foundation to unlock future opportunities and prosperity.

But the harsh reality is tertiary education costs a small fortune. Fees are one thing but accommodation, books, travel, living expenses and study aids, such as laptops, need to be included too, and they can blow the family budget.

Funding help is often needed. Here are three options.

1. Government funding

The National Student Financial Aid Scheme (NFSAS) awards bursaries to students with academic potential who don’t have the funds to study.

General requirements for application:

  • You must be a South African citizen
  • Your household’s total annual income must be less than R350 000
  • You must have completed Grade 9 and 10 in order to study at a technical and vocational education and training (TVET) college, and matric with exemption to study at a university.

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A successful applicant is awarded a bursary that fully covers the year’s study fees, as well as an allowance for food, accommodation, travel and personal items.

NFSAS directly contacts the institution where the student has applied to establish how much funding is needed. The money for studies is paid directly to the university or college. The student’s allowance for living expenses is paid into a bank account called the NFSAS Wallet.

Details can be found on its website at nsfas.org.za.

The bursary is awarded on an annual basis. The student needs an average of at least 50% at the end of the academic year in order to qualify for the next year’s bursary.

NSFAS awards bursaries for degrees, diplomas or qualifications only within the National Qualifications Framework (NQF) at a university or college. NSFAS doesn’t fund short courses or studies at a private facility.

2. Student loans from a bank

These loans are awarded for undergraduate and postgraduate studies at public or private institutions accredited by the South African Qualifications Authority. Short courses also qualify but there are usually conditions, such as the course must be at least two months in duration.

General requirements for application:

  • You must be a South African citizen and earn more than a certain monthly income (for example, R3 000 a month)
  • If you don’t earn an income – as is often the case – a guarantor (for example, a parent or guardian) with fulltime employment, proof of income and a good credit score takes out the loan on your behalf
  • You’ll need proof that you have been accepted at a tertiary institution.

Student loan amounts vary. It’s usually awarded on an annual basis so if you’re continuing your studies, you’ll have to apply again for the next year.

Generally, the interest on student loans is less than on other debt, such as credit cards and personal loans. The specific interest rate is calculated according to the guarantor’s risk profile.

There are additional expenses, such as interest, services fees, and insurance for the guarantor and student in the case of death or permanent disability.

The guarantor is usually responsible for paying these expenses for the duration of the study period.

Once the student graduates, the loan becomes their responsibility. If they drop out before graduating, they have to start repaying the loan immediately.

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3. Personal loans

This is a regular short-term loan from a bank or other credit provider.

A personal loan is expensive debt. The maximum interest rate is the repo rate (6,5% at present) plus 21% a year, so a total of 27,5%.

The interest rate might be lower than this if the applicant has a good credit score and not too much other debt.

If you go this route, apply with different credit providers and choose the one with the lowest interest rate and fees over the same period and for the same amount.

If this is your only option for student finance, be sure to take out the loan with a credit provider registered with the National Credit Regulator (NCR). This ensures there are legal limits to the fees and interest charged.

General requirements for application:

  • A regular monthly income of, for example, at least R2 000 a month, depending on the loan amount
  • You must be older than 18
  • ID, proof of residential address and the past three months’ pay slips or bank statements.

If you have no income you will have to ask someone such as a trusted friend or family member to take out the loan for you – but they will be 100% responsible for the repayments.

You will then have to come to a separate arrangement to pay them back. You could perhaps, on your own or with the help of a lawyer, draw up a contract detailing the repayment.

More funding help
  • Contact the institution where you want to study for information about bursaries and other forms of finance. Certain universities, for example, offer merit bursaries.
  • Find more information on student loans from banks’ websites.

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