The plight many South African students face is the fact that the cost of tertiary education is generally steep. In light of the #feesmustfall movement which placed the spotlight on the issue of tuition costs in South Africa, it is evident that the struggle faced by those who do and don’t have adequate finances to pay for their studies is getting tougher as the years progress.
The load becomes much lighter when you become one of the few individuals, who manage to obtain a bursary however a large number of people resort to taking up student loans to bridge the financial gap. Here are points to consider should this be the route you plan on taking.
Loans are repayable … with interest
Unlike bursaries, student loans – like any other loan - come with the weight of having to repay the borrowed amount with interest incurred on the initial amount. According to an article on moneyweb.co.za, interest on study loans is based on the prime rate, which shifts in line with changes to the repo rate; they are subject to change and likely increase in the current rising interest rate environment”. Due to the country’s economic climate, where both prime lending and repo rate figures stood at 10.50 and 7.00 respectively on 1 April 2016 as stipulated by the Reserve Bank - it is advisable to do some calculations before visiting your preferred bank or education finance company.
Private loans are more expensive
Unlike financial assistance provided through academic institutions and the government, such as the National Student Financial Aid Scheme (NSFAS) or Funza Lushaka, loans acquired through private companies, although easier to obtain tend to have higher interest rates. Thus it may be of good use to research financial services providers offer the best rates and will offer and an ideal repayment plan for you.