How Do Student Loans Work in South Africa?

If you’re planning to pursue higher education in South Africa and want to understand your funding options, you’re in the right place.

Being accepted into a university or college is an exciting milestone, but that excitement is often tempered by the reality of rising tuition fees and the true cost of higher education.

With tuition fees rising each year, many students and their families find themselves wondering how they’ll afford university or college. The good news? Student loans and other financial aid options exist to help bridge that gap.

We’ll walk you through everything you need to know about student loans in South Africa, from how they work to where you can apply, who qualifies, and how they differ from scholarships and bursaries.

What Is a Student Loan?

A student loan (also known as an education loan) is borrowed money used specifically to pay for tertiary education costs. Unlike a gift or grant, a student loan must be repaid, usually with interest, after you complete your studies or leave your institution.

Generally, you can only get a student loan from a South African banks or financial institution. This type of loan is different from a personal loans, as all proceeds are earmarked for payment towards tuition, or other school-related expenses such as boarding, textbooks, food, and others.

How Do Student Loans Work?

Student loans have a few requirements that differentiate them from traditional loans before the process can begin. Here’s how the process typically works:

1. Application: You apply for a loan through a financial institution or government scheme.
2. Approval: The lender assesses your application based on eligibility criteria.
3. Disbursement: Once approved, funds are typically paid directly to your educational institution to cover tuition, accommodation, and sometimes books and living expenses.
4. Grace Period: Most lenders offer a grace period (usually 6–12 months after completing studies) before you need to start repaying.
5. Repayment: You repay the loan in monthly instalments over an agreed period, plus interest.

What Can Student Loans Cover?

The student loan is restricted to cover the following expenses:

• Tuition and registration fees
• Accommodation (on-campus or off-campus)
• Textbooks and study materials
• Meals and living allowances
• Transport costs
• Equipment (laptops, calculators, etc.)

Who Qualifies for a Student Loan in South Africa?

Eligibility requirements vary depending on whether you’re applying for government funding or a private loan. Let’s break down both:

NSFAS (National Student Financial Aid Scheme) Requirements

NSFAS is the government’s primary student funding program, and it’s specifically designed for students from financially disadvantaged backgrounds. To qualify, you must:

• ✅ Be a South African citizen
• ✅ Be accepted at a public university or TVET college
• ✅ Come from a household with a combined annual income of R350,000 or less
• ✅ Not already hold an undergraduate qualification at the same level
• ✅ Be registered for an approved qualification

Important Note: Since 2018, NSFAS funding has been converted to a bursary for qualifying students, meaning you won’t have to pay it back if you meet the criteria.³ However, if your household income exceeds the threshold, you may still need to explore loan options.

Private Student Loan Requirements

Private banks and lenders have their own criteria, which typically include:

• ✅ Being a South African citizen or permanent resident
• ✅ Being 18 years or older (or having a parent/guardian apply on your behalf)
• ✅ Acceptance at a recognised tertiary institution
• ✅ A creditworthy applicant or guarantor/surety (someone who agrees to repay if you can’t)
• ✅ Proof of income (yours or your surety’s)
• ✅ Clean or acceptable credit record

Where Can I Get a Student Loan in South Africa?

There are several avenues to explore when looking for student funding in South Africa:

1. NSFAS (National Student Financial Aid Scheme)

• Best for: Students from low-income households
• Website: www.nsfas.org.za
• Type: Government bursary/loan (now mostly bursary for qualifying students)
• Interest: None for qualifying students

2. Fundi (Formerly Eduloan)

• Best for: Students who don’t qualify for NSFAS
• Website: www.fundi.co.za
• Type: Private education finance
• Features: Flexible repayment options, covers various institutions

3. Banks that offer Student Loans in South Africa

Most major banks offer student loan products:

4. Other Private Lenders

• IntelliMali: Pre-paid student funding solutions
• Manati: Student loans for postgraduate studies
• Varsity Vibe: Partners with various funding solutions

How to Apply for a Student Loan in South Africa

The application process differs depending on where you’re applying. Here’s a step-by-step guide:

Applying for NSFAS

1. Visit the official NSFAS website at www.nsfas.org.za
2. Create a myNSFAS account using your South African ID number
3. Complete the online application form with accurate information
4. Upload required documents:

• • Certified copy of your ID
  • Certified copy of parent/guardian ID
  • Proof of income (payslips, affidavit if unemployed)
  • Proof of registration or acceptance letter
  • Disability annexure (if applicable)
    5. Submit your application before the deadline (usually between August and November for the following academic year)

6. Track your application status through the myNSFAS portal

Pro Tip: Apply early! NSFAS applications typically open around August each year for the following academic year.

Applying for Private Bank Loans

• Each commercial bank features a unique screening and vetting process before it grants students funding. Here are the most common steps that you need to follow when applying:
  • 1. Research and compare loan products from different banks
    2. Check eligibility requirements and calculate how much you need
    3. Gather required documents:
    • • Certified ID copy (yours and surety’s)
      • Proof of residence
      • Proof of income (surety)
      • Acceptance letter or proof of registration
      • Quotation from institution showing fees
      • Bank statements (3–6 months)
  • 1. Apply online, via the bank’s app, or in-branch
    2. Wait for approval (usually 24–48 hours for initial feedback)
    3. Sign the loan agreement and have funds disbursed

Understanding Repayment: What to Expect

Before taking out a student loan, it’s crucial to understand the repayment terms:

Key Terms to Know

• • • Interest Rate: The percentage charged on the borrowed amount (can be fixed or variable)
    • Prime Rate: Many loans are linked to the prime lending rate (e.g., prime + 2%)
    • Grace Period: The time between completing studies and starting repayment
    • Loan Term: The total period over which you’ll repay (typically 5–10 years)
    • Monthly Instalments: Your regular payment amount

Sample Repayment Scenario

Note: These are estimates. Actual payments depend on current interest rates and specific loan terms.

Loans for Students Who Are Unemployed

One of the biggest challenges facing prospective students in South Africa is the catch-22 of student financing: you need money to get an education, but you need an education to get a job that pays money. If you’re unemployed—which most full-time students are—securing a student loan can feel nearly impossible.

But don’t lose hope. Let’s explore your options in detail.

The Reality: Why Banks Are Hesitant

Banks and private lenders are in the business of managing risk. When you’re unemployed, you represent a higher risk because:

• • • You have no regular income to demonstrate repayment ability
    • You likely have little to no credit history
    • There’s no guarantee you’ll find employment after graduation

This is why most private student loans require either proof of income or a surety/guarantor who does have stable income and a good credit record.

Understanding the Role of a Surety (Guarantor)

A surety or guarantor is someone who legally agrees to take responsibility for your loan repayments if you’re unable to pay. This person essentially co-signs your loan and puts their own credit record on the line.

Who Can Be a Surety?

• • • Parents or guardians
    • Extended family members (aunts, uncles, grandparents)
    • Older siblings with stable employment
    • Family friends willing to help
    • Employers (in some cases)

Requirements for a Surety Typically Include:

Options for Unemployed Students Without a Surety

If you don’t have access to a surety, your options become more limited—but they’re not non-existent.

1. NSFAS: Your Best Option

The National Student Financial Aid Scheme remains the most accessible option for unemployed students from disadvantaged backgrounds. Here’s why:

✅ No surety required ✅ No credit check ✅ No interest charges ✅ Converted to a bursary (doesn’t need to be repaid if you qualify) ✅ Covers tuition, accommodation, books, meals, and transport

Eligibility Reminder:

• • • South African citizen
    • Household income below R350,000 per year
    • Accepted at a public university or TVET college
    • First-time undergraduate qualification

If Your Parents Are Unemployed: This can actually work in your favour for NSFAS applications. You’ll need to provide:

• • • An affidavit declaring unemployment
    • SASSA grant confirmation (if applicable)
    • UIF documentation (if applicable)
    • Any proof of household income or lack thereof

2. Bursaries and Scholarships

Before taking on debt, exhaust all free money options:

Government Bursaries:

• • • Funza Lushaka (for teaching students)
    • Department of Health bursaries
    • Department of Agriculture bursaries
    • SETA bursaries (various sectors)

Corporate Bursaries:

• • • Sasol
    • Eskom
    • Transnet
    • Anglo American
    • Old Mutual
    • MTN Foundation

University Financial Aid: Many universities have their own financial aid offices that offer:

• • • Merit-based scholarships
    • Need-based bursaries
    • Emergency funding
    • Work-study programs

3. Fundi’s Study Assist Program

Fundi (formerly Eduloan) offers some flexibility for students without traditional sureties:

• • • May consider alternative forms of security
    • Offers smaller loan amounts with more accessible criteria
    • Partners with certain institutions for easier approval
    • Has options where repayment begins after studies

Contact Fundi directly to discuss your specific situation—they’re known for working with students who don’t fit the traditional mould.

4. Institution Payment Plans

Many universities and colleges offer their own financing solutions:

• • • Extended payment plans: Spread fees over the academic year
    • Deferred payment arrangements: Pay after you start earning
    • Internal bursaries: Institution-specific financial aid
    • Work-study programs: Work on campus to offset fees

Contact your institution’s financial aid office directly to explore these options.

Alternative Strategies for Unemployed Students

If traditional loan routes aren’t working, consider these alternative approaches:

📌 Start at a TVET College

TVET (Technical and Vocational Education and Training) colleges offer:

• • • Lower fees than universities
    • Practical, job-focused qualifications
    • Better NSFAS coverage
    • Opportunity to work sooner and save for further studies

📌 Study Part-Time While Working

Consider:

• • • Part-time degrees or diplomas
    • Evening classes
    • Distance learning through UNISA or other institutions
    • Online courses and certifications

This allows you to earn while you learn and fund your education incrementally.

📌 Gap Year Strategy

Take a planned gap year to:

• • • Work and save money for fees
    • Build a credit record
    • Apply for bursaries and scholarships
    • Gain work experience that might attract sponsors

📌 Crowdfunding and Community Support

Platforms like BackaBuddy and Feenix allow students to create fundraising campaigns for education. Many South Africans have successfully funded their studies through:

• • • Community contributions
    • Church and religious organisation support
    • Stokvels and community savings groups
    • Social media fundraising campaigns

📌 Employer Sponsorship

Some employers offer:

• • • Study assistance programs
    • Learnerships and apprenticeships
    • Bursaries for part-time study
    • Tuition reimbursement

Even entry-level jobs at larger companies might come with education benefits.

What Documents Unemployed Students Need

When applying for any form of financial aid, unemployed students should prepare:

Tips for Unemployed Students Seeking Funding

• For unemployed students, the journey may be more challenging, but it’s far from impossible. Thousands of South Africans have overcome similar obstacles to achieve their educational dreams. The key is persistence, thorough research, and a willingness to explore all available options. Here are a few tips for student seeking funding to further their education:

✨ Apply Early and Apply Widely

Don’t wait until the last minute. Submit applications for:

• • • NSFAS (August–November for the following year)
    • Multiple bursaries (deadlines vary)
    • University financial aid
    • Private loans (as backup)

✨ Build Your Case

Create a compelling narrative:

• • • Write strong motivation letters
    • Gather reference letters from teachers, community leaders, or employers
    • Document your financial circumstances thoroughly
    • Highlight your academic achievements and potential

✨ Network and Seek Guidance

• • • Visit your school’s career counsellor
    • Connect with university financial aid offices
    • Join student forums and Facebook groups
    • Reach out to NGOs that support education

✨ Consider Co-Applicants

If one family member can’t qualify as a surety alone, some lenders allow:

• • • Multiple sureties sharing the responsibility
    • Combined household income assessment
    • Alternative security arrangements

✨ Improve Your Position

While waiting to study:

• • • Get any job to show income potential
    • Open a bank account and manage it responsibly
    • Avoid any negative credit listings
    • Save whatever you can, even small amounts

Organisations That Help Unemployed Students

Several NGOs and organisations specifically assist students who face financial barriers:

Real Talk: Managing Expectations

Let’s be honest about the challenges:

❌ Private bank loans without a surety are extremely difficult to obtain ❌ The “missing middle” (household income R350,000–R600,000) often falls through the cracks ❌ Competition for bursaries is fierce ❌ NSFAS has capacity limitations and sometimes delays

However:

✅ Persistence pays off—many students eventually find funding ✅ Multiple small funding sources can add up ✅ Starting at a TVET college or part-time is still progress ✅ Delaying study by a year to save is not failure

Success Stories: It Can Be Done

Thousands of South African students who started with nothing have successfully funded their education through:

• • • Combining NSFAS with part-time work
    • Securing bursaries after initial rejections
    • Starting at TVET colleges and transferring to universities
    • Working for a few years before studying full-time
    • Finding mentors and sponsors through networking

Your circumstances don’t define your destiny. The path might be harder, but it’s not impossible.

Student Loan vs. Scholarship vs. Bursary: What’s the Difference?

This is one of the most common questions students ask. Let’s clear up the confusion:

Student Loan

Scholarship

Examples of Scholarships in SA:

• • • Allan Gray Orbis Foundation Scholarship
    • Mastercard Foundation Scholars Program
    • University-specific merit awards

Bursary

Examples of Bursaries in SA:

• • • Sasol Bursary
    • Eskom Bursary
    • Funza Lushaka (for teaching students)
    • Various SETA bursaries

Quick Comparison Table

*Some bursaries require repayment if you fail to complete studies or meet work-back obligations.

Tips for Successfully Securing Student Funding

✨ Start Early

Begin researching funding options at least a year before you plan to study. Many deadlines fall in the year prior to enrollment.

✨ Apply to Multiple Sources

Don’t put all your eggs in one basket. Apply for NSFAS, scholarships, bursaries, AND have a bank loan as a backup plan.

✨ Keep Documents Ready

Have certified copies of all important documents prepared in advance.

✨ Maintain Good Grades

Many funding options require you to maintain a certain academic standard to continue receiving funding.

✨ Read the Fine Print

Understand all terms and conditions, especially interest rates, repayment terms, and any work-back obligations.

✨ Budget Wisely

If approved for more than you need, only take what’s necessary. Less debt = less to repay later.

Student Funding FAQs

Q: Can I get a student loan with bad credit? A: It’s challenging, but possible. You’ll likely need a surety with good credit to co-sign your loan.

Q: What happens if I can’t repay my student loan? A: Contact your lender immediately to discuss options. Ignoring payments can damage your credit record and lead to legal action.

Q: Can international students get student loans in South Africa? A: Most government funding and bank loans are reserved for South African citizens. International students should explore funding from their home countries or specific international student programs.

Q: Is NSFAS a loan or bursary? A: For students with household income under R350,000, NSFAS funding is a bursary (doesn’t need to be repaid). Previously, it operated as a loan.

Q: Can I work while repaying my student loan? A: Absolutely! In fact, employment is typically necessary to make your monthly repayments.

Q: Can unemployed students get student loans from banks? A: Generally, no—not without a creditworthy surety. Banks require proof of repayment ability, which unemployed students typically cannot demonstrate independently.

Q: What if I can’t find anyone to be my surety? A: Focus on NSFAS if you qualify, apply for bursaries and scholarships, explore institution payment plans, and consider crowdfunding or working before studying.

Q: Does NSFAS require a surety? A: No, NSFAS does not require a surety or credit check, making it the most accessible option for students from low-income households.

Remember: education is valuable, but so is financial wisdom. Borrow only what you need, understand your obligations, and always have a repayment plan in mind before signing on the dotted line.

Sources

• 1. NSFAS, 2025