Paying for tertiary education in South Africa can be costly, with expenses like fees, textbooks, and accommodation placing a burden on many families. For those needing financial help, the main options are loans, grants, and bursaries, each with different rules and conditions. Some must be repaid, while others are non-repayable and may be based on financial need or academic results. There can also be work-back obligations or interest charges.
Key Takeaways
- Loans must be repaid with interest: These are borrowed funds that usually require a guarantor. Repayments often begin after graduation, making them useful but resulting in long-term financial commitment.
- Grants and bursaries are non-repayable: These are awarded based on financial need, academic merit, or study field. Bursaries may have work-back conditions that require service after graduation.
- Assess and prioritise funding types carefully: Focus first on grants and bursaries, research early, and only use loans if necessary to cover remaining education costs.
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What is a Loan?
A loan is money borrowed to cover the cost of studies, which must be repaid with interest. South African student loans are available from banks and private lenders and may be used for tuition, accommodation, books, and living expenses. Most loans require a guarantor who has a steady income and good credit. Repayments often begin after graduation, with some lenders requiring interest-only payments while studying. Interest rates vary and are usually linked to the prime rate. While loans make education more accessible, they create long-term debt that must be managed carefully after completing studies.
Types of Student Loans
Government Loans
South Africans from households earning under R350 000 per year can apply for study loans through the National Student Financial Aid Scheme (NSFAS), provided they hold a National Senior Certificate and are accepted at a public university or Technical and Vocational Education and Training (TVET) college. NSFAS covers tuition, registration, accommodation, meals, and transport. Funding must be applied for every year, and students must pass at least 50 percent of their modules to qualify for continued assistance. Depending on academic results, up to 40 percent of the loan may be converted into a bursary, reducing the amount owed. Repayments only begin once the student finishes studying and earns over R30 000 per year, starting at 3 percent of their annual income. For example, someone earning R30 000 would repay R900 per year, which works out to R75 monthly.
Bank Loans
A student loan from a South African bank requires a surety who earns more than R3 000 per month and has a clean credit record. The loan itself is issued in the student’s name, but the surety guarantees repayment. Each bank has its own conditions, interest rates, and repayment plans, so comparing offers is necessary. Repayment typically begins after graduation, although interest is paid during studies. Loan terms vary depending on the bank’s policies.
Private Company Loans
Private institutions such as FUNDI and Helpmekaar Studiefonds offer education-specific loans with terms suited for students. These lenders work outside the traditional banking system and may offer flexible payment plans. Repayments are usually split into two periods: during studies, interest is paid by a surety; after graduation, the student repays both capital and interest. Some providers offer a grace period of 6 to 12 months post-graduation, giving the student time to find a job. In certain cases, graduates may negotiate with employers to pay off the loan in return for a service contract. If employment is not found within the grace period, the surety becomes responsible for the repayment.
What is a Grant?
A grant is financial assistance that does not have to be repaid. Grants in South Africa are often provided by the government or institutions and are aimed at students from low-income households. NSFAS is one of the most recognised sources of grant funding, covering costs such as tuition, accommodation, and meals. Grants are usually awarded based on financial need, though some may focus on specific study areas or fields. To qualify, applicants must meet certain income and academic criteria. While grants offer reliable support, the funding is limited, and not all applicants are approved.
Types of Education Grants Available in Africa
Individual Scholarships
These are grants awarded to students who come from households with limited financial means. The aim is to provide support for learners to continue their education at primary, secondary, or university level. A well-known example is the African Leadership Academy Scholarships, which pay for both tuition fees and boarding costs for academically talented students. Another example is the Deutscher Akademischer Austauschdienst (DAAD) Scholarships for Africans, which provide funding to assist African students in pursuing postgraduate studies at institutions in Germany.
School Improvement Grants
This category of grants is aimed at supporting schools by giving them the financial resources needed to improve their facilities, buy teaching and learning materials, or provide training for educators. One such programme is the Global Partnership for Education (GPE) Grants, which work to strengthen education systems and improve the way schools are managed. Another example is Save the Children’s Education Programmes, which help fund essential education services in under-resourced and rural areas.
Research Grants
These grants are intended for funding academic research and encouraging the development of new knowledge or practical solutions in various disciplines. They are typically awarded to universities, researchers, or academic institutions. A key example is the African Research Universities Alliance (ARUA), which promotes joint research activities among universities across the continent. The Wellcome Trust Grants are another example, offering support for research projects that focus on health, education, and related fields.
Community Education Grants
These grants aim to support learning initiatives at a community level, which can include programmes for adult education, early childhood development, or literacy improvement. One notable example is the Aga Khan Foundation, which provides funding for local education projects that are led and managed by communities. Another is Plan International, which concentrates on helping children in disadvantaged communities gain access to basic education.
What is a Bursary?
A bursary is funding given to a student to help pay for studies, usually without the need for repayment. Bursaries are offered by universities, companies, government departments, and non-profit organisations. They may be based on academic results, financial need, or chosen field of study. Some bursaries cover full study costs, while others cover only tuition or specific expenses. Many come with a work-back condition, where the student agrees to work for the sponsor after graduating. If these conditions are not met, the bursary may need to be repaid. Bursaries are a popular option for South African students who want to avoid debt, though they are competitive and often come with strict terms.
The Types Of Bursaries Available
Government-Funded Bursaries
These bursaries are aimed at making higher education more accessible, especially for students from low-income households. NSFAS (National Student Financial Aid Scheme) offers full financial support for qualifying students at public universities and TVET colleges, covering tuition, accommodation, meals, transport, and study materials. DHET International Scholarships, provided through the Department of Higher Education and Training, allow South African students to study in countries such as Germany, Ireland, South Korea, and the United States through specific academic partnerships.
Prestigious International Scholarships
These competitive awards not only cover the full cost of study but also include leadership and personal development opportunities. The Mandela Rhodes Scholarship supports postgraduate students with a focus on leadership and community involvement. The Rhodes Scholarship offers full funding to study at Oxford University in the UK, and is regarded as one of the most respected and competitive scholarships available to South Africans.
University-Specific Scholarships
Many South African universities provide their own scholarships, which can be based on academic performance or financial need. The University of Cape Town (UCT) offers a range of funding options for both undergraduate and postgraduate students. The University of Johannesburg (UJ) runs several schemes, including the Vice-Chancellor’s Scholarship, which is awarded to top-performing students based on their final school results.
Corporate And Private Bursaries
Private companies and organisations often fund students studying in areas relevant to their industries. The Nedbank Bursary Programme focuses on fields such as finance, accounting, and economics. The Industrial Development Corporation (IDC) supports students in engineering, agriculture, and IT. Mediclinic and ER24 Bursaries are for those in health sciences, including nursing and emergency medical care. The Liberty Actuarial Science Bursary assists students in actuarial studies, particularly those with strong results in mathematics and related subjects.
Additional Resources And Bursary Portals
There are several useful online platforms that help students identify and apply for bursaries. SmartFunder connects students to a wide range of funding options. FundiConnect allows users to compare bursaries, scholarships, and loan offerings. ZA Bursaries is a well-established site offering an up-to-date list of current bursary opportunities in South Africa across various study fields.
Comparative Overview of Loans, Grants, and Bursaries in South Africa
| Aspect | Loans | Grants | Bursaries |
|---|---|---|---|
| Definition | Borrowed money used to pay for education, which must be repaid with interest after you finish studying. | Financial support awarded (often by government or institutions) that does not need to be repaid. | Financial support given to students, often based on merit or need, which generally does not require repayment if conditions are met. |
| Repayment | Must be repaid with interest, usually starting after graduation. | No repayment required. | Usually no repayment, unless conditions (such as work-back agreements) are not fulfilled. |
| Source | Banks, private lenders, government schemes (e.g. NSFAS). | Mostly government or public-sector funded. | Universities, companies, non-profits, or government departments. |
| Eligibility | Based on credit approval, guarantor requirements, and sometimes financial need or academic record. | Based mainly on financial need and, in some cases, specific study fields or personal circumstances. | Based on academic achievement, financial need, or chosen study field; may include conditions like work-back agreements. |
| Conditions | Requires a surety/guarantor, interest is charged, and repayment conditions vary between lenders. | Usually awarded to low-income families; funds are limited and competitive. | Often competitive and may require academic performance or community service; some bursaries have strict contracts about working for the sponsor after graduation. |
| Advantages | Enables students to access studies immediately, even if they cannot pay upfront. | No repayment obligation makes this the most affordable support option. | Does not create debt if conditions are met, supports academic development, and sometimes includes mentorship or internships. |
| Disadvantages | Creates long-term debt; interest charges can be high; risk of default if repayments cannot be met. | Limited funding and strict eligibility; not everyone qualifies. | Highly competitive, with strict eligibility and performance requirements; may require repayment if obligations are broken. |
| Examples | NSFAS loan, bank student loans, private educational lenders like FUNDI or Helpmekaar Studiefonds. | NSFAS grants, government social grants for education, school improvement grants, community education support grants. | NSFAS bursaries, DHET International Scholarships, Mandela Rhodes Scholarships, corporate bursaries (e.g. Nedbank, Mediclinic, IDC). |
| Common Requirements | South African ID, acceptance at a recognised institution, guarantor with income, academic progress to maintain funding. | Proof of financial need, South African ID, acceptance at an accredited institution, sometimes a motivational letter or proof of community circumstances. | Good academic performance, proof of acceptance, South African ID, sometimes an agreement to work for the bursary sponsor after graduation. |
| Best For | Students who cannot get grants or bursaries and need to finance education costs immediately, with a repayment plan. | Students from low-income households who qualify for non-repayable funding. | Students with strong academic records or pursuing fields with skills shortages, and who are willing to commit to sponsor terms. |
How To Decide Which Financial Aid Is For You
- Assess your personal finances and academic objectives to understand what type of aid will best suit your situation.
- Consider the total cost of your education, including tuition, books, accommodation, and transport.
- Evaluate your family’s financial situation and whether you will have any income during or after your studies.
- Decide if you need full or partial financial support, depending on how much of the costs you can cover yourself.
- Begin researching grants and bursaries as early as possible, focusing on those that align with your academic record, financial need, or extracurricular activities.
- Review loan options carefully before borrowing, paying attention to interest rates, repayment terms, and eligibility requirements.
- Aim to secure non-repayable aid first, such as grants and bursaries, before turning to loans.
- If needed, combine different types of aid to fully cover your educational expenses.
Conclusion
Knowing the difference between loans, grants, and bursaries is essential for any South African student planning to fund their education. Each option has its own rules, conditions, and long-term implications. Loans provide access to funding but must be repaid with interest, while grants and bursaries offer financial support without repayment, depending on eligibility and obligations. Students should assess their financial situation, academic goals, and long-term plans before choosing which form of aid to apply for. Wherever possible, non-repayable aid should be prioritised, and a combination of funding sources may be the most practical solution to cover the full cost of tertiary studies.
Frequently Asked Questions
What is the main difference between a bursary and a loan?
A bursary does not usually need to be repaid, unless the student fails to meet certain conditions. A loan must be repaid with interest after graduation.
Can I receive both a grant and a loan at the same time?
Yes, in some cases students may qualify for both. This is common when a grant does not fully cover all study costs, and a loan is needed to cover the shortfall.
Do all bursaries require a work-back agreement?
No, not all bursaries include a work-back obligation. However, many do, especially those offered by companies or government departments, and the terms will be stated in the bursary contract.
Are student loans only available from banks?
No. While banks are a common source of student loans, there are also private lenders and government-funded options like NSFAS that offer loans under specific conditions.
How early should I apply for financial aid?
It is best to apply as early as possible, usually the year before you intend to start studying. Many bursaries and grants have strict deadlines, and early application increases your chances of approval.
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