POLOKWANE – Ask a toddler what he or she wants to be when they grow up and you will get a variety of answers, be it a doctor, teacher or pilot. What these youngsters do not know yet is that, apart from hard work and good marks, they will also need funds to go to a university.
The #FeesMustFall protests created awareness about the exorbitant tertiary study expenditures at South African universities. For most students and their parents, or those responsible for paying their fees, tertiary education is very expensive.
As indicated in the medium-term budget policy statement issued by Minister of Finance Pravin Gordhan, the financing of education should be the government’s main priority.
Wikus Olivier, debt management expert at DebtSafe, provides further insight. Olivier says there are three types of loans that students can investigate:
A student loan
A student loan is designed to help students pay for tertiary education and the associated fees involved, such as tuition, books and living expenses. This option differs from other loans in the sense that the interest rate could be considerably lower and repayment only begins when the student has completed his or her studies. There are several institutions that offer student loans, for example: ABSA, Nedbank, Standard Bank and FNB.
“In many cases, young working adults don’t take into account the money they have to pay back when they start earning a salary. They commit themselves to other credit agreements, such as vehicle financing. Unfortunately for them, the institution that provides the student loan, expect payment.”
A personal loan
“A personal loan is given by the bank, which you pay back monthly over a fixed period. The fixed interest rates on a personal loan are much higher than that of a student loan but lower than a credit card. It also creates stability as the fixed amount enables you to budget in advance. If the student is under the age of 18, a parent or someone who meets the qualifying criteria, must co-sign on the student’s behalf. Personal loan options can be obtained from banks and other institutions such as givemecredit and HippO.co.za.”
Keep the following in mind when you consider applying for a personal loan:
- Credit providers are required to give you a quote and they should clearly explain how the fees and premiums work. This gives you the opportunity to choose the best option given by the different providers and you can compare their services with each other.
- Once the agreed upon personal loan amount is paid to your account, there is an immediate expectation to pay the instalment.”
A bursary
Many institutions offer scholarships on an academic, cultural or sports performance basis, which means that they partially or fully pay for your studies. Some employers also create scholarships for employees who wish to further their studies. The advantage of a bursary is that you do not have to apply for a loan because somebody else carries the financial implications for you. The National Student Financial Aid Scheme (NSFAS) is a well-known organisation that awards bursaries (as well as loans). For further bursary options, visit the AMB Media website.
Many individuals regard tertiary education as a key element to a successful career and life. Olivier advises students to thoroughly do their homework on study loans in advance. This will ensure the best option is chosen to suit their needs.
