Study Loan
STUDY LOAN GUIDE
If you're:
- still at school and figuring out how to fund further studies
- currently studying and needing funds to continue or further your studies
- a young adult wanting to study further but needing financial assistance
- an employer who would like to find a way for his or her employees' children to have brighter futures, then this Q & A will guide you and give you a sense of the role that NSFAS plays.
Note: Application for a study loan should be made at the institution where you would like to study, not at NSFAS.
The National Student Financial Aid Scheme (NSFAS) is a loan and bursary administration scheme, operating in terms of Act 56 of 99.
The money that you borrow to cover the costs associated with your tertiary studies.
The study loan does need to be repaid.
The student loans attract a very low interest rate.
We will grant study loans without need for guarantees or sureties.
Depending on the student's academic results, portions of the loan can be converted to a bursary.
A very reasonable repayment plan, based on your earnings.
All repaid student loans are recycled to fund more needy students.
Academically deserving students who meet the following criteria:
- A South African citizen
- Registered at a South African university or university of technology
- An undergraduate, studying for a first higher educational qualification, or
- Studying for a second higher qualification (if necessary to practise in your chosen profession. Eg: LLB or HDE)
- Able to demonstrate potential for academic success
- In need of financial assistance
NSFAS does not allocate funds directly to students but here's the plan:
- First, apply at the educational institution where you are planning to study. Some institutions will issue you with an application for study together with an application for financial aid. You need to enquire from the institution about their processes and deadlines for both.
- Submit both applications to the institution and if you have any questions contact the Financial Aid Office (FAO) on campus who will:
- evaluate your ability to succeed in your chosen study direction
- advise you about study loans and help you with the student loan application
- explain how you'll access the money and repay your student loan
- importantly, decide whether you are financially needy of a study loan
Contact the NSFAS Call Centre on 021 763 3232 for more information.
When applying for a NSFAS study loan at a university or university of technology., you'll need to take the following documents with you:
- Grade 12 certificate
- Green SA identity document with barcode
- Proof of parents' latest income (eg pay slip, pension, grant or affidavit if the parent is unemployed)
- Proof of registration of siblings (ie brothers, sisters who have registered for studies or at school) if they live in the same household
- If you are disabled, you'll need a letter from your medical doctor showing proof of permanent disability
- Letter of acceptance from institution (university, university of technology.)
Yes and No.
Nothing stops you from applying but the decision to allocate funds is based on:
- financial needs (determined by a national means test), and
- having the academic potential to succeed.
The university or university of technology. will guide you.
You only start repaying the study loan once you start earning a salary.
The method of payment can include a debit order, direct deposits into the NSFAS account, postal orders, cheques or employer deductions.
You will receive quarterly statements from NSFAS.
We make repayments affordable for you.
Repayments of your study loan are based on the salary that you earn, starting only once your salary is R30 000 or more per year. Your payments start at 3% of your annual salary, increasing to a maximum of 8%
when your salary reaches R59 300 or more.
A bursary is that portion of the award that does not need to be repaid. The size of the bursary is dependant on your academic success.
Up to 40% of the loan may be converted into a bursary, and does not need to be repaid depending on your year end results, which are re-evaluated every year after your first year of tertiary study.
Our interest rate is much lower than that of bank loans as it is subsidised by donations from government, private companies and overseas donors. Our interest rate is generally equal to the rate of inflation plus 2%. The 2% contributes towards the administration costs and any shortfalls, which allows us to continue helping students. Currently it is at 5.2%.
Money left over is never paid out to you. The Financial Aid Bureau (FAB) of the institution concerned will pay it back to NSFAS and you'll avoid paying interest on it and we'll then have more funds to help other students like you. Funds paid back to us are used as your first repayment of your student loan.
You don't.
BUT, you'll need to provide written proof (in the form of an affidavit, valid for 3 months) to the NSFAS head office if you're unemployed. A telephone call is not good enough.
It is important to know that we will continue charging interest on outstanding balances so that we can preserve the original value of the loan. It is very important to start repaying your loan as soon as possible.
Please stay in contact with us, making sure that information such as employment status, personal details such as address and telephone numbers etc are up to date.
We have to remain viable in order to assist the future generations of students just like you who need assistance in order to realise their potential.
NSFAS charges interest on the capital amount as from 1 April of the year in which the loan was granted.
As from 1 April 2008, the interest rate is linked to the repo rate, as determined by the South African Reserve Bank (SARB).The repo rate is the rate at which SARB lends money to other banks. The NSFAS rate is pegged at 80% of the repo rate and fluctuates in line with changes to the repo rate.
Bursary rebates and your credit balance appears when NSFAS receives the academic results and refunds from institutions. This takes place at the end of the NSFAS financial year.
The academic results are used to calculate any rebates. For example, 40% of the student loan will be converted into a bursary if you pass all courses. If half of the courses have been passed, then 20% of the student loan will be converted to a bursary. If no courses are passed, no bursary rebate will be calculated for the relevant academic year.
NSFAS is prepared to make advance payments to institutions for students who would normally qualify for a NSFAS study loan. This however is only the case for students who qualify for full NSFAS awards (typically where the EFC or Expected Family Contribution is zero or close to zero) and it is likely that that the student will be excluded from studying or face significant hardship raising funds required at registration time.
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