Financial Obligations of Student Loans and Bursaries in South Africa
If you’re a new student or an aspiring college applicant looking for financial aid to help you settle your university tuition and housing fees, then you’ve come to the right place.
Today, I’ll be sharing with you all the information I have regarding the two major forms of university funding, that is student loans and bursaries.
Read to the end to learn all there is to know about both options, including their financial obligations, how to apply and successfully secure the funding for yourself.
How do bursaries work in South Africa?
Bursaries are simply like scholarships but with an extra layer of commitment.
While they cover costs like tuition, accommodation, and even living expenses, they usually come with specific conditions. These can include:
- Maintaining good academic performance: This is an obvious one because you have to work hard to deserve the money they’ll be giving you.
- Working for the sponsor after graduation: Some bursaries will require you to work for the sponsor company for a set period after graduation.
- Fulfilling community service requirements: Giving back to society is awesome, and some bursaries might have you volunteering your time after graduation.
- Staying in a specific field: Some bursaries only support studies in certain sectors. These are usually fields like engineering, medicine, architecture, etc.
What is a student loan and how does it work in South Africa?
Student loans are like any other loan: you borrow money, you pay it back with interest after a period of time.
Compared to bursaries, they offer more flexibility in terms of study choices and career paths. However, with that freedom comes the burden of repayment:
Interest starts from the moment you borrow: Time is money, and student loan interest starts ticking the second you get the funds.
Repayment starts after graduation: Get ready to budget, because post-grad life includes loan repayments on top of other expenses.
Defaulting on your loan can have serious consequences: Missed payments can damage your credit score, making it harder to get loans in the future.
What are the Financial Obligations of Student Loans in South Africa?
Here’s the harsh reality of student loans: you owe the money back, with interest. The terms and rates vary depending on the lender, but generally, you should expect:
Interest rates between 7% and 12%: That means your loan can increase over time if you don’t repay on time.
Repayment periods of up to 10 years: You must make a plan to pay your debt consistently.
Administrative fees: These are extra charges added by the lender, so make sure you include them in your budget.
Remember, student loans are a serious financial commitment. Before taking it, explore all your options, understand the terms, and plan your repayment strategy.
What are the Financial Obligations of Bursaries in South Africa?
While bursaries don’t require direct financial repayment, their obligations can still impact your future:
Meeting academic requirements: If you fail to maintain good grades, you could end up losing the bursary, and this will leave you stranded.
Fulfilling work obligations: You must be prepared to honor your post-graduation commitment to the sponsor company.
Limiting career choices: If your bursary is tied to a specific field, your job options might be fewer after graduation.
Student loans and bursaries are great for funding your education, but they come with responsibilities.
Choose wisely, understand the obligations, and budget effectively to avoid financial stress down the line.