What to do if you want to study further but don’t know how to fund it | Drum (2024)

Studying is expensive but help is available.

Every parentdreams of giving their children the best education possible, equipping themwith a solid foundation to unlock future opportunities and prosperity.

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

Funding help isoften needed. Here are three options.

1. Governmentfunding

The NationalStudent Financial Aid Scheme (NFSAS) awards bursaries to students with academicpotential who don’t have the funds to study.

General requirementsfor application:

• You must be a South Africancitizen
• Your household’s total annual income must be less than R350 000
• You must have completed Grade 9and 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 successfulapplicant is awarded a bursary that fully covers the year’s study fees, as wellas an allowance for food, accommodation, travel and personal items.

NFSAS directlycontacts the institution where the student has applied to establish how muchfunding is needed. The money for studies is paid directly to the university orcollege. The student’s allowance for living expenses is paid into a bankaccount called the NFSAS Wallet.

Details can befound on its website at nsfas.org.za.

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

NSFAS awardsbursaries for degrees, diplomas or qualifications only within the NationalQualifications Framework (NQF) at a university or college. NSFAS doesn’t fundshort courses or studies at a private facility.

2. Studentloans from a bank

These loans areawarded for undergraduate and postgraduate studies at public or privateinstitutions accredited by the South African Qualifications Authority. Shortcourses also qualify but there are usually conditions, such as the course mustbe at least two months in duration.

Generalrequirements for application:

• You must be a South Africancitizen and earn more than a certain monthly income (for example, R3 000 amonth)
• If you don’t earn an income – as isoften the case – a guarantor (for example, a parent or guardian) with fulltimeemployment, proof of income and a good credit score takes out the loan on yourbehalf
• You’llneed proof that you have been accepted at a tertiary institution.

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

Generally, theinterest on student loans is less than on other debt, such as credit cards andpersonal loans. The specific interest rate is calculated according to theguarantor’s risk profile.

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

The guarantoris usually responsible for paying these expenses for the duration of the studyperiod.

Once thestudent graduates, the loan becomes their responsibility. If they drop outbefore graduating, they have to start repaying the loan immediately.

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3. Personalloans

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

A personal loanis 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 interestrate might be lower than this if the applicant has a good credit score and nottoo much other debt.

If you go thisroute, apply with different credit providers and choose the one with the lowestinterest rate and fees over the same period and for the same amount.

If this is youronly option for student finance, be sure to take out the loan with a creditprovider registered with the National Credit Regulator (NCR). This ensuresthere are legal limits to the fees and interest charged.

Generalrequirements 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 residentialaddress and the past three months’ pay slips or bank statements.

If you have noincome you will have to ask someone such as a trusted friend or family memberto take out the loan for you – but they will be 100% responsible for therepayments.

You will thenhave to come to a separate arrangement to pay them back. You could perhaps, onyour own or with the help of a lawyer, draw up a contract detailing therepayment.