Many tertiary institutions have closed applications for financial aid and bursaries. For example, the closing date for undergraduate bursary applications at the University of Johannesburg (UJ) was 15 August 2014.
However, for those who did not meet the institution deadlines, student loans are still available from many banks.
In addition to funding from tertiary institutions and banks, the National Student Financial Aid Scheme (NSFAS) provides loans and bursaries to students in need of financial aid.
This year the scheme will provide loans and bursaries to the value of R9.5 billion, as well as an additional R526.9 million for the development of scarce skills.
However, the demand for financial aid from NSFAS and the tertiary institutions outweighs the supply, and the Department of Higher Education has launched an investigation into the dispersal of funds to ensure that the students receiving the funds meet all the requirements.
This lack of loans and bursaries has led to students needing to find alternative means of financing their studies. In many cases this is in the form of a student loan from a bank.
Omar Baig, head of consumer lending at Absa reveals that applications for student loans peak in the period January to March, with another peak in June, in line with the tertiary intake periods.
Absa
Absa offers a study loan to people who are enrolled or are enrolling in a tertiary institution as a full-time or part-time student.
The study loan allows students to pay their tuition fees, for textbooks and all other costs related to their studies. To qualify for a study loan from Absa, a student needs to have successfully passed matric, and the course needs to be SAQA or SETA accredited.
"At Absa, study loan accounts are only advanced to salaried individuals and in accordance with the National Credit Act. Be it a parent, sponsor or part time student earning a minimum salary of a set amount, individuals applying for study loans are governed by set affordability and scoring rules," says Baig.
For the period of study, the sponsor responsible for the loan only pays the interest that is due on the loan.
Once the student has completed their studies, the loan must be paid-off over a period no longer than the time it took too complete the course.
Once the student has completed their studies and is working they can take over the loan repayments from the sponsor if they can prove that they can afford the repayments.
Absa offers a grace period for students who need to complete community service upon completion of studies.
Standard Bank
The Standard Bank student loan is granted for a specific year of study with the student having to reapply for the loan each year that they are registered at the tertiary institution. In order to qualify for a student loan, the course and institution need to be accredited by SAQA, SETA, Umalusi or the Department of Higher Education (DHE).
Once the loan has been approved, you or your sponsor will be responsible for a once-off initiation fee, as well as a monthly service fee.
While studying, Standard Bank requires the student to submit a copy of their marks as well as proof of registration or of the qualification by 31 March of each year.
To apply for a student loan from Standard Bank, you must be registered with a tertiary institution and studying for a certificate, diploma, degree, or postgraduate studies, and have passed your pervious year of study.
Full-time students will also get a Standard Bank transaction account if their loan is approved. The type of account will depend on the student's needs.
Nedbank
The Nedbank student loan covers the cost of tuition, textbooks, accommodation and study-related equipment.
When applying for a student loan, the student and sponsor will be liable for a once-off administration fee [what does this fee amount to?] and then a monthly debit order to pay back the interest on the loan, which is calculated at a rate of 10,5%.
When applying for a student loan with Nedbank, the student must reapply for each year of registration, as a loan is only granted for a specific year of studying. The course must be SAQA accredited and be carried out over a period of at least 12 months.
The sponsor who signs surety on the loan will be responsible for paying the interest on the loan amount while the student is still studying. When applying for the loan, a repayment schedule should be established with the bank, as both the capital and interest should be repaid upon the completion of studies.
Repayment schedules for full-time students equates to 1.5 years for each year of study. Part-time students will be expected to make repayments from the moment the loan is granted.
A grace period for loan repayment is granted if the student is required to complete an internship, community service or articles after completion of studies.
Once the loan has been approved by Nedbank, the student and sponsor will need to go to the branch where the application was made and sign all necessary documentation, following which all tuition payments will be made directly to the tertiary institution, while other study-related fees will be paid into the student's account.
First National Bank
The FNB Life Start Student Loan offers students studying at a tertiary level a loan between R4 000 and R80 000, with a new loan application required for each year of study. The loan covers your tuition fees, which are paid directly to the institution.
In order to qualify for a Life Start Student Loan, your sponsor must be permanently employed, having worked for the employer for a reasonable period of time.
The sponsor should also earn a minimum of R6 000 per month. The sponsor is responsible for paying the interest amount of the loan while the student is still studying with the remaining amount owed after completion of studies.
The monthly repayments will be calculated according to your risk profile and the terms of the loan.
Requirements when applying for a student loan*
- Identity Document (ID) for student and sponsor
- Final matric results or last academic results
- Proof of income (latest payslip) for sponsor or the student if studying part-time
- Proof of current residential address for student and sponsor
- Three months bank statements for sponsor
- Invoice of fees owed from the tertiary institution
- Invoice of additional study costs (e.g. accommodation)
- Marriage or divorce certificate of sponsor (if applicable) for the banks records if there is a problem with the account in the future
Justmoney says:
Shop around when applying for a loan to ensure that you get the best deal that is suited to your study needs.
It is also important to read the fine print and ensure that you are aware of the conditions of the loan, how the repayment scheme operates, and what you are liable for.
*Contact the bank or visit the website before applying for a student loan to ensure that additional documentation is not required.