Even after #FeesMustFall, free education is only available to a relatively small number of qualifying students. Many will need to take out a student loan to fund their studies. Here’s what you need to know if you’re considering taking out a student loan.

Who is eligible for free higher education?

Free higher education is available through National Student Financial Aid Scheme (NFSAS) for:

* South African students

* With a household income of less than R350 000 a year

* Who are first time, full-time students for undergraduate degrees (and a small number of post graduate degrees like an LLB).

So, many students will need to take a student loan to fund their studies or short courses.

Ask your bank these questions

A student loan must be repaid when you complete your studies. This can be onerous on a young person starting out, so it is important to understand the terms and conditions of your student loan. We’ve compiled a list of questions you can ask your bank below to help you understand your loan.

  1. How much can I apply for?
    Most loans allow you to apply for the cost of tuition, books, essential computer equipment, such as an entry level laptop, and a living allowance if you are not living at home. Some institutions have a minimum you can apply for, so find out what this is. Others may have a maximum. Be sure to ask the course coordinator or student advisor what computer or other equipment you may need, such as a lab coat and safety glasses, so you can apply for the full cost.
  2. Do I need someone to stand surety?
    The answer is usually yes, but check. A surety is the person who guarantees the loan and will be liable for repayment if something happens to you and you cannot repay the amount. A surety will need to be employed and have some relationship with the student – such as a guardian or parent. Also ask what happens if the surety passes on so you have a plan if this happens.
  3. How much interest is charged, when does it need to be repaid and by whom?
    Your loan will begin accumulating interest immediately and this will need to be repaid monthly while you are studying. In general, when you are a full-time student, the interest and bank charges are billed to the person standing surety. If you are studying part time you are liable for the interest and bank charges. Ask if you can negotiate a good interest rate, and if there is an option to fix interest rates, which may be to your advantage if interest rates are very low.
  4. To whom is the loan paid out?
    Some banks prefer to pay the loan to the university, some will pay the amount into the student’s loan account. Living allowances are mostly paid to a residence, or the student’s bank account. When it comes to books, check how these will be paid – you want to be able to get your books as quickly as possible. If your bank pays the bookstore directly, check which bookstores they recommend. Also ask how you pay for books ordered online or how you pay for second-hand books bought from an individual.
  5. When do I need to repay the loan?
    When you have finished studying you will need to repay your loan over a period of time. When you take out your loan ask how long you have to pay it off, what the repayments will be and how interest is calculated when you are repaying the loan.
    If you are going to complete an internship or articles there should be a grace period for this time – but check.Unfortunately, South Africa’s high unemployment rate means even the top students may not find work after completing their studies. Most banks will give a grace period if you cannot find work – but make sure to check this or the surety will need to start repaying the loan.
    Also ask if there is a minimum you need to be earning to start paying back the loan. For example – you may find part time work as a waiter while you look for a good job. Check if the bank classifies this as employed or not.
  6. What if I want to study further?
    You may want to complete an honours degree or higher diploma when you have completed your undergraduate degree. You’ll need to ask your bank if they will fund this, either by adding it on to your existing loan, or through a new loan, and, if so, when you need to repay the loan and interest on the new amount.
  7. Where can I study?
    Free education funding available through NFSAS is only applicable for studies at public higher education institutions. Banks will approve student loans for studies at these institutions and private institutions – and in some cases international or online learning organisations. Check that the institution where you want to study is on the bank’s approved list.
  8. What if I qualify for a bursary or am awarded a prize or scholarship?
    High performing students are often awarded partial bursaries or scholarships. If you are an ace at your subjects, ask your bank how this impacts your student loan. Do you need to reduce the loan amount by how much you receive as a bursary, or pay it into your student loan account, or can you use the scholarship to fund extra books or equipment?
  9. What if I fail or need to repeat a subject?
    University can be tough for first time students, and you may need to repeat a subject or course. Ask your bank what happens in this case and if you still qualify for the loan and can extend the term of the loan before you start repaying the loan amount in addition to interest and bank charges.
  10. What if I change universities or courses?
    This is another frequent occurrence. You may apply for your first choice and not be accepted, then begin studying your second choice. If you do well, you may be accepted into your first choice after first year, which means an additional year of study. Or another university may offer subjects and courses you are more interested in. If you think this may apply to you, ask your bank before taking the loan how it would affect your loan, interest and repayments.

Final words

Student loans enable young people to pursue their studies in their chosen fields. But loans come with obligations and conditions. Asking these questions before you sign your student loan papers will make sure you know what is expected of you and when. Good luck with the studies!

Where can I find more information?

NFSAS: www.nfsas.org.za
Information about free higher education. NFSAS also administers a number of bursaries.

National Research Foundation: www.nrf.ac.za
Information on funds and bursaries for postgraduate studies.

Department of Higher Education and Training: www.dhet.gov.za
General information and a list of international scholarships.

Lists of bursaries, scholarships and student competitions:
Bursaries South Africa: www.zabursaries.co.za
Bursaries SA: https://bursaries-southafrica.co.za
All Bursaries South Africa: https://allbursaries.co.za
GoStudy: www.gostudy.mobi
SA Study: https://sastudy.co.za
Student Brands: https://studentbrands.co.za
Student Competitions: https://studentcompetitions.com/

University and TVET financial aid offices
Each university and TVET will have a financial aid office that can assist with funding and bursary questions.

Company websites
Visit the pages of companies in your field of interest, to see if they fund studies and offer bursaries.

Professional association websites
Check the pages of the professional association for the career you are interested in such as the Engineering Council of South Africa to see if they have funding for further studies.