A student loan refers to money that is borrowed from the government or lender to pay for your university or college tuition fees. The money that has been borrowed has to be paid back with interest over a period of time.
Students, with their parents/legal guardians need to enquire information from the Free Application for Federal Student Aid (FAFSA) and receive forms before applying for the loan. Once the financial information has been completed, the form is then sent to the institution of the students choice (a university or college).
The institution will then decide the amount of financial aid the student qualifies for and will send them a letter of their financial aid offerings. Once the letter has been received, the student can then go ahead and apply for a student loan.
The next step after receiving their financial aid offerings, is for the student to choose their loan provider. There are various South African banks that provide loans for students, such as Nedbank, Capitec, and Standard Bank. To choose one that is best suited for you and your financial needs, compare the different options to each other before deciding on the first one you find.
Look at the different bank charges/loan fees, the pay-back process and requirements, possible student discounts, as well as the student loan application requirements. Keep in mind that banks/loan providers won't have the exact same criteria an applicant needs to meet.
Taking out a student loan generally requires that the money be paid back over a certain period of time. As a student, you'll most likely be unable to fully repay the loan on your own. Getting a suretyship is a good way to have someone stand by you to make sure the money will be repaid. The person who stands surety with you takes on the responsibility of ensuring that a sum of the money will be repaid, as their responsibility is to repay the loan if you are unable to.
If you do not have someone that can stand surety for you, the National Student Financial Aid Scheme (NSFAS) offers loans to students that have no surety.
As mentioned before, different banks have different application criteria that needs to be met before going ahead with the rest of the process. There are certain documents that need to be on hand when applying for a student loan, namely:
- SA Identification
- Proof of home address
- Proof of acceptance and registration from an educational institution
- Latest payslip of the person standing surety
- Three months bank statements
- Proof of university costs
Once all is in order and you've been approved for a student loan, the institution of your choice will receive a direct payment of the necessary fees from the financial institution providing your student loan. Keep an eye out for any further confirmation or proof the bank or educational institution may require from you.
