Different Types of Tertiary Funding in South Africa: Scholarships VS Student Loans

Sep 9, 2024
Different Types of Tertiary Funding in South Africa: Scholarships VS Student Loans picture

Tertiary education is a crucial stepping stone to a successful future. However, the high costs associated with obtaining a qualification can be a challenge for many students. Fortunately, there are various funding options available to help South African students further their studies without worrying about costs. In this blog post we will explore Scholarships and Student Loans as funding options.

 

Different Types of Tertiary Funding in South Africa: Scholarships VS Student Loans

 

What is a student loan? 

A study Loan is a loan designed to help students pay for post matric education. A study loan can cover tuition fees, books, transport, accommodation, food and living expenses. The loan has to be paid back by the student or the parents over a period of time or in monthly instalments. Loans are usually paid back with interest. If you are studying full time, you might need to have someone sign a surety agreement. In this agreement, they agree to be responsible for paying your interest rates and fees while you are studying. It's important to choose someone you trust and who has a stable income." 

 

Types and Examples of Study Loans 

1. Student loans from the banks

Banks in South Africa can offer qualifying learners student loans to further their studies in public and private higher learning institutions. The following four major banks offer student loans:

 

2. Student loans from the independent credit providers 

Independent credit providers are entities that offer loans and credit services outside of traditional financial institutions like banks and credit unions. Here are examples of student loans from the independent credit providers: 

 

Student Loan Requirements

Student Loan Requirements may vary between lenders but here are some general requirements of student loans in South Africa:

  • Your parents or guardians should be employed and earn a certain minimum income each month.
  • Your parents or guardians should have a good credit history
  • You must have been accepted to study in a higher learning institution

 

Student Loan required documents

The majority of Student Loan Lenders, require the following documents to accompany your application:

  • Student certified ID copy
  • Certified copy of Matric results
  • Proof of registration from the institution
  • Proof of Residence
  • Certified ID copies of your parents or guardians
  • Parents or guardians proof of income (3 payslips)
  • Some credit providers may require a 3 months bank statements

___________________________________________________________

 

What is Scholarship?

A scholarship is a grant or a payment made to support a student’s education. Scholarships come from a variety of different sources such as organisations, charities, foundations, companies, government, universities and colleges. It is usually awarded based on high academic performance or other achievements or conditions. Many scholarships that are awarded in South Africa allow students to study in an international university (another country). There are both undergraduate and postgraduate scholarships.

 

Types of Scholarships 

Some scholarships are awarded based on the following:

  • Gender
  • Religious Affiliation
  • Voluntary work and social engagement
  • Sporting background
  • Financial need
  • Outstanding academic performance
  • Career path/Specific subject

 

Scholarships Requirements 

The requirements for scholarships can vary depending on the sponsors. Here are some examples of the requirements that sponsors might ask candidates to meet when applying:

  • You should come from a certain country
  • Age
  • You must currently be in matric, have completed matric or a registered student in higher learning institution
  • You must study full time/ part time
  • Interview/Test especially if it is an international scholarships
  • Some Scholarships may require that students be residing in a certain area
  • High academic performance (Academic scholarships) 
  • Come from a disadvantaged background (gender/ Financial need scholarship)
  • You must be studying or have been accepted to study in a certain field (Career Path Scholarship)
  • Great leader/involved in community development (Voluntary work and social engagement Scholarship)
  • Involved in church development (Religious Scholarship)
  • Talented in sports (Sports Scholarship)


 

Scholarships Required Documents
 

Required documents for the scholarships vary from sponsors. Below are examples of some of the documents that may be required from applicants.
 

  • Your certified ID copy 
  • Your grade 11 report if you are currently in matric
  • Your certified Matric results if completed matric 
  • Certified copies of your qualification or certificates if applicable 
  • Certified copies of the most recent academic record if currently studying 
  • Proof of registration at tertiary or an acceptance letter 
  • Certified copy of ID of parents or guardians
  • Parents or guardians proof of income (latest payslip if they are employed/ affidavit if unemployed/ proof of grant or pension if applicable/affidavit or death certificates if deceased)
  • Proof of residence 
  • Motivational letter to support your application and explain why you should be awarded the scholarship
  • Testimonials/recommendation letter (from the principal, church or local civic leader)
  • Curriculum Vitae 
  • Portfolio if you have applied for art and design scholarships 

 

___________________________________

 

Scholarships VS Student Loans

Before making a decision on which funding option you will consider to fund your tertiary education, have a look on the advantages and disadvantages of both student loans and scholarships, to make informed decisions. 

 

Advantages of Student Loans

  • Student loans cover all Costs Related to Higher Education (tuition fees, books, transport, accommodation, food and living expenses)
  • It is easy to apply for a student loan
  • Study loans provide students with the financial support needed to pursue their chosen qualifications. 
  • No Closing Dates for Student Loans Applications (students can apply for a loan at any time of the year)
     

 Disadvantages of Student Loans

  • Most student loans accumulate interest over time. 
  • Repayment of student loans typically starts after a grace period or once the borrower completes their studies. 
  • Failure to repay student loans on time can negatively affect a borrower's credit score
  • Monthly loan repayments can limit a borrower's ability to allocate funds for other important expenses, such as housing, transportation, and daily living costs



Advantages of Scholarships

  • Variety of scholarship 
  • You do not have to pay back the money 
  • You may be hired after completing your studies by the company that provides the scholarship 
  • Scholarships allow students to further their studies and obtain a qualification
  • Scholarships allow students to have a chance of staying in another country 
  • Networking/Boost your CV
  • Cover your educational expenses (allowance)



Disadvantages of Scholarships

  • You forfeit your scholarship if you no longer meet the set requirements
  • Pressure to perform well
  • May undergo tests and interviews
  • Scholarships are usually awarded for the year of study that you applied for, you have to reapply for your scholarship each year.
  • Some scholarships do not cover all the educational expenses 

 

When exploring tertiary funding options, it's important to research the specific requirements for each type of funding. Additionally, consider the terms and conditions of any loans or bursaries you may receive, as these can have a significant impact on your financial future.

By carefully considering the available funding options and planning ahead, you can increase your chances of successfully financing your tertiary education and achieving your academic goals.

Comments

No comments yet.