All About Student Loans

Securing a student loan is a practical step for many individuals aiming to fund their tertiary education. These loans are designed to cover various expenses associated with higher education, including tuition fees, books, and, in some cases, accommodation and related costs. Students, parents or guardians often consider such loans as an investment in the student’s future, with the expectation that the individual’s earning potential will increase as a result of the education they are able to obtain through this financial aid.

Financial institutions, ranging from commercial banks to specialised educational finance companies, typically offer student loans. The terms of these loans, such as interest rates and repayment schedules, can vary greatly depending on the provider and the financial product selected. Some of these loans feature perks, like reduced interest rates for young professionals, interest-only repayments for a certain period, or the potential to finance both part-time and full-time studies.

When considering a student loan, it’s essential to evaluate the loan’s features in conjunction with personal circumstances. Factors to take into account include the interest rate, which can impact the overall cost of the loan, and the repayment terms, which will influence the financial commitments during and after the study period. It’s also advisable to assess additional services or support offered by the loan provider, such as online platforms for managing the loan or ancillary services like sourcing student accommodation.

Student Loans

Understanding Student Loans

Navigating the terrain of student loans is essential for prospective tertiary education students who seek funding options. This section breaks down the essentials of student loans in South Africa, from types and terms to managing the debt they create.

Types of Student Loans

Student loans can be categorised into two main types: government-funded loans and private loans. Government-funded loans are provided by national schemes, while private loans are offered by banks and other financial institutions. Each type of loan comes with its own set of terms and specifications, and may be tailored to full-time or part-time students. Interest rates on these loans can vary widely and may be influenced by the borrower’s personal circumstances.

  • Government-Funded Loan: Typically has more favourable terms, such as lower interest rates.
  • Private Loan: Offered by banks like FNB, and companies such as Fundi, with personalised interest rates based on credit scores.

Terms and Conditions

The terms and conditions of student loans include the interest rate, repayment plan, and any additional fees or requirements such as credit life insurance. Interest rates may be fixed or variable and are applied to the loan amount. A repayment plan outlines how and when the loan will be repaid, often requiring monthly repayments to start after graduation.

  • Interest Rate: Can be fixed or variable, with personalised rates possible.
  • Repayment Plan: Details the structure of repaying the loan.

Eligibility Criteria

To be eligible for a student loan, applicants are usually required to be a South African citizen and have proof of acceptance into a tertiary institution. They may need to provide academic results, proof of income, and a guarantor/surety to secure the loan. Eligibility may hinge on whether one is a full-time or part-time student, as well as the accreditation of the educational institution by the South African Qualifications Authority.

  • Proof of Income: Necessary to demonstrate capability to repay the loan.
  • Surety: A person who agrees to repay the loan if the student is unable to.

Application Process

The student loan application begins with completing an application form and submitting necessary documents, such as a bank statement, proof of registration, and more. It’s essential to contact the lending institution directly for specific requirements.

  • Document Submission: Includes bank statements, proof of registration, and academic results.
  • Contact Us: Lenders provide guidance through their customer service channels.

Loan Repayment

Loan repayment becomes active after the student graduates, usually with a grace period before the first payment is required. Repayments are typically made monthly, and the terms may allow for a re-spread of arrears if financial difficulties arise.

  • Monthly Repayments: Set amounts paid on a regular schedule post-graduation.
  • Re-spread of Arrears: Offers flexibility in repayment terms under certain conditions.

Financial Management

Effective debt management is crucial for students taking loans. Budgeting is a fundamental skill that can prevent the accumulation of unmanageable debt. Debt management tips, such as avoiding unnecessary expenditures and prioritising loan repayments, are essential practices.

  • Budgeting: Track spending and savings to manage repayments smoothly.
  • Debt Management Tips: Strategies for students to manage their loan effectively.

Assistance Options

Students may explore additional options such as bursaries, grants, or scholarships, which do not require repayment. Lenders and educational finance services might also provide assistance and advice for financially savvy decisions.

  • Bursaries: Additional funding that does not need to be repaid.
  • Educational Finance Services: Offer guidance on managing student loans effectively.

Accommodating Your Studies

When it comes to higher education, several aspects beyond just tuition fees come into play. Students must consider literature, technology requirements, living arrangements, transportation, and the availability of support services.

Accommodating Literatures

Students typically require a range of literature such as textbooks, study guides, and additional reading material relevant to their coursework. To manage costs, one might consider options such as second-hand books, library access, or e-books. Educational institutions often provide a prescribed list of textbooks which can be a significant part of the budget.

  • Textbooks: R800-R1200 per book
  • E-books: R300-R500 per book
  • Library access: typically included in tuition fees

Technology and Equipment

With the integration of technology into education, possessing the right equipment and devices like laptops or tablets is essential for online learning. Depending on the course, students may also need specialized study equipment. Prices for these items vary, but a reliable laptop can be a significant but necessary investment.

  • Laptops: R3000-R8000
  • Tablets: R2000-R6000
  • Study equipment: varies greatly depending on the course

Living and Transport

Accommodation and food are essential considerations for students moving away from home. Some may also need to factor in vehicle finance if living off-campus or in areas without accessible public transportation. Students should budget for rent, utilities, and food, along with any transport costs.

  • Accommodation: R4000-R7000 per month
  • Food: R1000-R2000 per month
  • Vehicle finance: depends on the credit terms and vehicle choice

Support Services

Universities offer various support services, ranging from academic assistance to mental health resources. Additionally, financial support in the form of student banking services like the MyMo bank account or Professional Banking account can aid in managing finances. For those interested, there are also options for online share trading to invest and possibly generate an income.

  • Academic support: often included in tuition fees
  • Banking services: usually offer student discounts or perks
  • Online share trading: typically requires personal capital and understanding of the market

In conclusion, when planning for higher education, students should carefully account for the full scope of necessities. From sourcing academic literatures to securing technological tools, arranging living spaces to managing day-to-day transport, and accessing supportive financial services—each plays a crucial role in the overall success of a student’s academic journey.

Costs and Fees

When considering a student loan, one must account not only for tuition and registration but also ancillary study costs and other financial obligations. It’s vital to be aware of these expenses to prepare adequately and identify avenues for potential savings.

Tuition and Registration

Tuition fees are the primary expense that a student loan is designed to cover. These fees vary depending on the institution and the course of study. Registration fees, which are due at the beginning of the academic term, are often overlooked but essential to factor into the cost of education.

  • Tuition Fees: Vary per institution, can be up to R360,000.
  • Registration Fees: Required for enrolment, can be a significant upfront cost.

Ancillary Study Costs

In addition to tuition, a student loan may be used for ancillary study costs such as educational equipment, textbooks, and other necessary materials. These costs can accumulate and should be considered when calculating the full financial requirement of one’s studies.

  • Educational Equipment: Includes devices, lab materials, etc.
  • Textbooks: Necessary for coursework, often expensive.

Additional Financial Considerations

Other financial factors include the cost of credit life insurance, sometimes required with student loans, and the implications of having a surety—a guarantor for the loan. One should also consider the cost of job hunting and the need for a career development plan after graduating.

  • Credit Life Insurance: Protects against default due to unforeseen circumstances.
  • Surety: A reliable person required to back the loan.

Cost-Saving Tips

Students can explore various cost-saving tips such as taking advantage of student discounts offered by the Varsity Vibe app and partnering with retailers for affordable supplies. It’s important to compare student loans carefully, as terms and interest rates can directly impact the overall financial obligation.

  • Varsity Vibe App: Offers student discounts.
  • Retailers: May provide cost-effective supplies and textbooks.

Leveraging Educational Investments

Investing in education is a strategic step that can yield significant dividends in an individual’s career and financial wellbeing. Proper utilisation of educational investments through student loans and savings plans can maximise career outcomes, harness educational resources effectively, and foster strategic networking and development.

Maximising Career Outcomes

Students should approach educational financing, such as student loans, with a career development plan in mind. Financing education is not just about covering tuition fees; it’s an investment with the goal of maximising future earning potential. Varsity and university graduates generally have higher lifetime earnings than non-graduates, but students should also consider the return on investment when choosing their field of study.

  • Select a field of study prudently: Research potential earnings and job market demand.
  • Invest in career-relevant experiences: Internships and practical training programmes.

Utilising Educational Resources

When students secure education finance, they must leverage the full spectrum of resources provided by their varsity or university. These resources go beyond the classroom and include access to:

  1. Extensive libraries and research materials,
  2. Cutting-edge technology and facilities,
  3. Online courses and seminars for additional learning.

Students can request an online quote for student loans on financial institutions’ websites before enrolling to ensure the resources align with their educational goals.

Financial Services Support

Banks and private financial service providers such as Fundi and FNB Loans offer specialised support for student loans. Here is how they can assist:

  • Fundi: Offers support and information regarding responsible lending and the right to debt counselling. Their contact us details are available for further assistance.

    • Contact Fundi: [0860 627 627](tel:0860 627 627) / NCR website
  • FNB Student Loan: Provides personalised assistance for students looking to apply for a loan, with a focus on the benefits of a personalised interest rate and repayment plans.

    • Contact FNB: FNB Loans through their dedicated contact us page on the website.

Governmental and NGO Support

Governmental bodies like the National Student Financial Aid Scheme (NSFAS) and other non-governmental organisations offer support to South African citizens who are unable to fund their studies. They can be contacted for information on bursaries and loans for students who meet the eligibility criteria set by the South African Qualifications Authority (SAQA).

  • NSFAS: They provide bursaries to students who are financially needy and who have not been able to secure bank funding, study loans, or bursaries.

Students should verify that they are accessing legitimate and official support avenues by comparing the contact details found on official websites with those provided through independent channels.


The following glossary provides essential terminology related to student loans, encompassing key financial concepts, education-related terms, and common phrases found in loan agreements.

Key Financial Terms

  • Student Loans: A form of financial aid that must be repaid over time, with interest, used to cover higher education expenses.
  • Interest: The cost of borrowing money, typically expressed as an annual percentage of the loan principal.
  • Interest Rates: The proportion of a loan charged as interest, usually an annual rate. Rates may be fixed (unchanging over the loan term) or variable (fluctuate with market conditions).
  • Personalised Interest Rates: Interest rates that are tailored to the borrower’s creditworthiness, often influenced by credit history and income.
  • Low Interest Rates: Competitively minimal interest rates that reduce the cost of borrowing, often designed to make education loans more affordable.
  • Repayment Plan: An agreed-upon schedule with the lender outlining how a borrower will repay the student loan. This includes the time frame, monthly payment amount, and interest rate.
  • Surety: An entity that guarantees the loan repayment, agreeing to repay the loan if the borrower is unable to do so. Also known as a guarantor.

Loan Agreements

  • Loan Principal: The original sum of money borrowed before interest.
  • Loan Term: The total span of time over which the loan will be repaid.
  • Grace Period: A set period after graduation or dropping below half-time enrolment during which a borrower is not required to make loan payments.
  • Default: The failure to repay a student loan according to the terms of the agreement, which can result in legal action and damage to the borrower’s credit rating.

Paths to Study

When pursuing tertiary education, students have diverse learning modalities to choose from, which can be influenced by their eligibility for student loans. Each path offers different advantages, and understanding these can be crucial for career development and job hunting post-graduation.

Full-Time vs Part-Time

A full-time student typically engages in a more intensive course load and is often viewed as being fully committed to their study. Student loans are readily available for these students if they meet the financial criteria and are enrolled in qualifying courses as outlined by the South African Qualifications Authority (NQF 5 qualifications or higher). In contrast, a part-time student may take a fewer number of modules per term and can balance work and academia, which may affect the type of financial support they qualify for.

Distance and Online Learning

Distance and online learning are flexible options that enable students to study from any location and often on their own time. These courses, offered by various universities, are particularly advantageous for students unable to attend campus-based programmes or those needing to manage other commitments. Student loans often cover the costs for these learning paths if they lead to recognised qualifications.

International Study Opportunities

Students seeking international exposure and high-quality education may consider studying abroad. They must ensure their course is recognised within South Africa to qualify for a student loan. Typically, students must present a compelling case for the necessity of international study in their chosen field to secure financial assistance.

Balancing Work and Education

Students who work while studying whether for financial reasons or career development, have to find a balance between their job responsibilities and academic commitments. Part-time study options can offer greater flexibility for such students, though this may impact the structure and availability of student loans. These students contribute to their tuition, thereby possibly reducing the amount they need to borrow.

Each educational path has distinct considerations regarding student loans and career progression, and students should evaluate these carefully to make informed decisions about their higher education journey.

After Graduation

After graduating, the next steps involve managing the transition into the workforce, beginning the repayment of any student loans, and potentially considering further educational opportunities.

Repaying Your Loan

Upon graduation, individuals must start the process of repaying their student loans. Usually, lenders provide a grace period of 3-6 months before the first payment is due, allowing graduates time to secure employment. Repayment amounts are often calculated based on the graduate’s salary, ensuring that the monthly repayments are manageable alongside other living expenses. Effective debt management strategies are crucial for financial stability post-graduation.

  • Monthly Repayments: Begin after the grace period; based on income.
  • Debt Management: Essential to maintain financial health and credit score.

Continued Education and Development

For some graduates, postgraduate studies may be a consideration for specialised career paths or to enhance their qualifications. An advanced degree can pave the way for higher earning potential and specialised career development. Graduates must weigh the costs of further education against potential income increases and career progression opportunities.

  • Postgraduate Studies: Consider for specialisation and higher qualification.
  • Career Development: Advanced degrees can lead to better job prospects and earnings.

Resources and Tools

Managing student loans effectively requires a combination of reliable resources and tools. Technology has made it possible for borrowers to access a variety of platforms and services that aid in financial planning and loan management, from online calculators to educational apps.

Online Calculators and Quotes

Online Calculators: Borrowers can benefit from free online calculators that help estimate monthly repayment amounts and plan the term of their loan repayments.

  • Online Quote Services: Many financial institutions and educational platforms provide instant quotes for student loans, aiding students in making informed decisions about borrowing.

Educational Apps and Platforms

  • Varsity Vibe App: This app offers students deals and specials, which can help save money that could be put towards loan repayment.

  • Online Learning Tools: Platforms that complement or supplement academic learning can be useful in ensuring educational goals are met more efficiently, potentially shortening the time to qualification.

Financial Planning Services

  • Debt Management Apps: These apps can assist with budgeting and prioritising loan repayments to reduce debt faster.

  • Banking Services: Banks often provide tools and services to manage student loan repayments alongside general financial well-being.

Governmental and Educational Websites

  • SAQA: The South African Qualifications Authority website is a resource for students to ensure their qualifications are recognised, which is essential for securing employment and paying off student loans.

  • Debt Management Tips: Governmental websites along with educational institutions may offer guidance and tips on managing student loans effectively.

Frequently Asked Questions

This section addresses some of the most common inquiries regarding student loans, offering clear information for potential applicants.

What are the criteria for qualifying for a student loan?

Criteria for student loan qualification typically include being a resident or citizen of the country, having a proven admission to an accredited institution, and in most cases, possessing a satisfactory credit history or having a guarantor.

Which financial institutions are known for providing the best student loans?

Various financial institutions are renowned for offering student loans, each with its own set of terms and rates. Potential borrowers should compare options with institutions such as Nedbank, which is an example of a bank that offers student loan services.

Are non-guarantor student loans available, and how can one apply for them?

Non-guarantor student loans are available but often require the borrower to have an independent income and the ability to make monthly repayments. These loans are more common for part-time students, and the application can be made directly through financial institutions offering such loans.

What are the requirements to obtain a student loan from a commercial bank?

Commercial banks often require evidence of enrolment in an accredited tertiary institution, proof of income or a guarantor, and a satisfactory credit score to grant a student loan.

Can students secure loans for attending private tertiary institutions?

Yes, students can secure loans for attending private tertiary institutions. Lenders typically consider the accreditation status of the institution when processing loan applications.

Do banks offer student loans for studying at overseas universities?

Some banks may provide loans for overseas studies. They typically assess the international accreditation of the university and the course of study, along with the usual credit and income considerations, when reviewing loan applications.

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