Frequently Asked Questions:
What is a student loan?
A student loan is the money you borrow from NSFAS to cover the costs of your studies at any of the 25 public universities in South Africa. This includes: tuition fees, residence or private accommodation, food, books and travel costs. This loan must be repaid to NSFAS when you finish studying and find employment. Depending on your results, up to 40% of your NSFAS study loan may be converted into a bursary, which you do not need to repay.
What documents do I need when I apply?
When you apply for NSFAS funding, you must attach all of the following documents:
- Grade 12 Certificate.
- South African Identity Document.
- Proof of parents' income.
- Proof of registration at college or university of brothers and sisters, who live in the same household.
- Proof of registration can be obtained at the institutions where your brothers and sisters are registered.
- Certified copies of their birth certificates and/or identity documents.
- A letter from your doctor to confirm proof of a permanent disability if applicable.
How do I repay the student loan?
NSFAS student loans are income-contingent, which means that repayment commences when you start working. NSFAS will send you statements to help you keep track of how much you owe.
It is your legal responsibility to keep in touch with NSFAS and to inform us of any change of address.
How are repayments calculated?
NSFAS has made repayments affordable for you. Repayments of your student loan are based on the salary that you earn, and start once your salary is R30 000 or more per year. The repayment amount starts at a calculation of 3% of your annual salary, increasing to a maximum of 8% when your salary reaches R59 300 or more per year. For example, this means you will repay R900 on a salary of R30 000 a year, or R75 per month. Once your annual salary reaches R59 300 your repayment will be R4 744 a year or R395 a month. You can select to pay more than this, so that you can pay your loan off faster, and reduce the amount of interest you will be charged on your loan.
Interest is charged at 80% of the repo rate, which is the repurchase rate at which the Reserve Bank lends to commercial banks. NSFAS will continue to charge interest on all outstanding balances, making it imperative that you start repaying your loan as soon as possible. The interest rate is set on the 1 April every year for the full year and does not change over the next 12 months.
Does NSFAS pay registration costs for first-year and returning students?
Yes, but only for students whose Expected Family Contribution measures 0 on the means test. Registration costs are usually the first payment towards your tuition costs, and if you have been confirmed for funding by NSFAS, most of the universities and TVET colleges will not expect you to pay the registration fees upfront.
What happens to any money left over from my NSFAS student loan?
Money left over from an NSFAS study loan is never paid out to you. The money is deducted from the balance you owe. You will not have to pay interest on it, and NSFAS will have more funds to help other students like you. Funds paid back to NSFAS are used as your first repayment of your student loan.
Does the number of students who apply increase each year?
Yes, the number of applicants increases as more students requiring financial aid enrol at university and TVET colleges.
How much funding does NSFAS have?
The NSFAS budget will increase from R9, 5 billion in 2015 to R10 billion in 2016/17 financial year. Of this amount, over R700 million has been allocated for full bursaries in scarce and critical skills for the current year.
Does NSFAS receive enough funding? Will more funds be allocated in the coming years?
The need for student financial aid is greater than the funds made available to NSFAS, despite the increases shown above. The number of students who apply for financial aid is greater than the number who can be assisted with the available funding.
In 2014, 289 105 students applied for NSFAS funding at the universities and only 186 150 were successful in receiving loans or bursaries from NSFAS. Since the early days of NSFAS, the number of students who have applied was always much higher than the amount of students who could receive funding. The percentage of students who applied but who were not funded has dropped from 68% in 1996, to 18% in 2014.
How many students benefit from NSFAS funding each year?
NSFAS assisted over 400 000 students at universities and FET colleges across the country in 2016. The numbers have more than doubled since 2009, when NSFAS provided loans and bursaries to 191 040 students, and continue to increase with each passing year.
How many students are in the higher education system, and how many are receiving NSFAS funding?
In the 2013 academic year (the number of students enrolled at universities for 2014 is not available), the number of students at university was 938 698 and of this, 194 923 were funded – approximately 20%. In the 2014 academic year for the TVETs, the number of students enrolled in the Report 191 and NCV programmes amounted to 645 444, of which 228 642 were funded, approximately 35%.
Does NSFAS pay the whole fee, or is a quarter or half paid by the student?
Full funding is paid for students who qualify and who pass the NSFAS Means Test with an expected family contribution of R0 or less, as the means test assesses their family's ability to pay something towards their studies. Students can qualify for varying amounts up to the maximum of R71 800 a year for a university student. This includes full tuition fees, accommodation, meals, books and travel. For students at the TVET colleges, the amounts funded for the Report 191 and the NCV are determined by the DHET.
What criteria or formula does NSFAS use to distribute money to the different universities?
NSFAS applies an allocations formula which takes into account the university's fees and the number of black, coloured and Indian students enrolled. Students who apply for financial aid are assessed in terms of the NSFAS Means Test, which determines how much assistance they qualify for. Universities than apply the rules and regulations set down by NSFAS to determine which students will be funded.
Do some universities get more funding from NSFAS than others?
Yes, the above formula gives different amounts to different universities, depending on how many previously disadvantaged students are studying at the university.
Does NSFAS have any measure in place in case a university has a shortfall and cannot accommodate all students that are eligible for funding?
There are always more students applying for financial aid than NSFAS can fund. Even though the budget for financial aid has increased significantly, there is still a massive shortfall. The NSFAS budget would have to increase significantly if it was intended to meet the needs of all eligible students. When the student centred model is in place in all universities and TVET colleges, the money will “follow the student” and will not be allocated to a university.
Do students have to pay the money back after completing their studies?
Yes, once they have started working and are earning more than R30 000 a year, they must start to pay back the loan.
How are repayments calculated?
How do you ensure that students pay back the money?
All students sign a legally binding contract to repay their loans. NSFAS contacts all students who graduate, or stop studying, to give consent for repayments to be deducted from their bank account every month.
How much debt does NSFAS have to date?
Outstanding NSFAS loans currently amount to R6.8 billion.
How much do students owe, on average?
The amount owed varies, as some students might be funded for only one year while others may be funded for their whole qualification. Some students owe R10 000, others owe R150 000.
How much of the loan repayment assists in funding other students?
Every cent of a loan repayment goes towards helping other students with funding.
Can NSFAS still thrive while carrying unpaid loans?
NSFAS receives annual allocations from government through the budget of the Department of Higher Education and Training to provide financial aid to students. This is supplemented by the loans paid back by students.
How many students pay back each year?
About 84 500 students pay back their student loans each year, making total repayments an estimated R45 million a month, or R540 million a year.
What is the process of paying back a loan, and how much time do students have to do this?
Students pay back based on a sliding scale between 3% and 8% of salary. Those who are unemployed are not expected to repay. No time limit is given for repayment, since this is determined by the salary of the debtor, and his or her ability to repay.
What happens if a student loses his/her job while still paying back their loan?
Those who are unemployed are not expected to repay, but must inform NSFAS whenever their employment status changes.
What measures are taken against students who fail to pay their debt after being funded by NSFAS?
NSFAS actively engages students about the importance of repaying their debt. Agencies are also used to trace debtors and make sure they repay.
What about students who drop out during their studies?
Students who drop out are still required to repay their loan when they start earning R30 000 or more a year.
NSFAS student loans are income-contingent, which means that repayment commences when you start to receive an income, usually when you start working. NSFAS will send you statements to help you keep track of how much you owe and how much you must pay back each month.
It is your legal responsibility to keep in touch with NSFAS and to inform us of any change of address.
NSFAS has made repayments affordable for you. Repayments of your student loan are based on the salary that you earn, and start once your salary is R30 000 or more per year. The repayment amount starts at a calculation of 3% of your annual salary, increasing to a maximum of 8% when your salary reaches R59 300 or more per year. For example, this means you will repay R900 on a salary of R30 000 a year, or R75 per month. Once your annual salary reaches R59 300 your repayment will be R4 744 a year or R395 a month. You can opt to pay more than this to reduce the interest you will be charged over the life of your loan and to pay your loan off over a shorter period of time.
Interest is charged at 80% of the repo rate, which is the repurchase rate at which the Reserve Bank lends to commercial banks. NSFAS will continue to charge interest on all outstanding balances, making it imperative that you start repaying your loan as soon as possible.
When and how is a loan converted into a bursary?
Different loans have different rules about conversion. Up to a maximum of 40% of a general loan is converted into a bursary when a student passes all of the courses they were registered for in that year. Students who apply at their institution's Financial Aid Office to be on the NSFAS Final-Year Programme have their final-year loans converted into a 100% bursary if they pass all of their final-year courses and qualify to graduate. If they do not pass all subjects, the conversion applicable to general loans is applied.
How do these bursary conversions show on NSFAS repayments?
The bursary conversion shows as a rebate on your statement when NSFAS receives your academic results from the university. This takes place at the end of the NSFAS financial year in April.
Your academic results are used to calculate any bursary rebates: for example, 40% of your student loan will be converted into a bursary if you pass all courses; if you pass half of your courses, then 20% of the student loan will be converted into a bursary. If you don't pass any courses, you will not receive any bursary rebate for that academic year and you will have to repay 100% of your student loan.
How much of NSFAS’s budget is allocated to loans and how much is allocated to bursaries, administration and salaries?
The total budget for loans and bursaries for the 2015/16 financial year (i.e. the 2015 academic year) was R9.8 billion. Of this, R2.2 billion was for bursaries for TVET college students and the rest for loans/bursaries to university students. The administration budget, which includes budget for loans and bursaries, is R181 million, with salary costs being approximately R99 million
Is it true that the NSFAS loans of successful third-year university students do not need to be repaid?
Students in their final year of study, who qualify to graduate if they pass all their courses, are eligible to be funded through the Final-Year Programme, a fund announced by the President in 2011. You may apply to be part of this programme at your institution's Financial Aid Office. Should a Final-Year Programme student successfully graduate, the loan is converted to a 100% bursary. Students can only benefit from this programme once.
Who qualifies for a TVET college bursary?
A student may qualify for a TVET college bursary if he/she is:
- Registered at a public South African TVET college;
- Registered for the National Certificate (vocational);
- Registered for certain Report 191 (NATED) programmes, including N1-N6 in engineering and N4-N6 in all other fields.
Do I have to repay this bursary upon completing my studies?
No, unlike a loan, the TVET college bursary is a 100% bursary and is not repayable.
How do I apply for a TVET college bursary?
Complete an application form at any FET college. Provide all the information required. Make sure that you have all the supporting documents required, such as:
- A certified copy of your South African Identity Document;
- Identity documents of parents or guardians;
- Proof of your parents’ or guardians’ income (salary slip or proof of pension).