The National Student Financial Aid Scheme (NSFAS) has released the 2025 Eligibility Criteria and Conditions for the NSFAS Student Loan Scheme. This details how NSFAS loan interest works.
NSFAS provides comprehensive funding to deserving students enrolled in approved courses at Universities and TVET colleges. Funding covers tuition and registration fees as well as several allowances for food, accommodation, and learning materials.
Hundreds of students are set to receive NSFAS loans. The government bursary scheme clarified how interest on the NSFAS loan works.
How NSFAS Loan Interest Will Work
NSFAS confirmed that loans do not accrue interest while the student is still studying, Interest will only start accumulating 12 months after the student's exit date (i.e., after graduation, dropping out, or completing their studies).
Loans are interest-free during the study period and will begin accruing interest 12 months after the student’s exit date.
The interest rate on the NSFAS loan is set at the prime lending rate as of April 1 each year, with a reduction of 100 basis points (1%).
Interest begins accruing 12 months after the student exits the institution and is calculated daily while being compounded monthly, meaning it is added to the loan balance each month.
However, in line with the in-duplum rule, interest accrual ceases once it equals the original loan amount, ensuring that the total interest does not exceed the capital sum.
Students must begin repaying their NSFAS loan during their first month of employment. The repayment will be done in monthly instalments that include both the loan amount and accrued interest.
NSFAS clarified that students can settle the loan early at any time without needing to notify the scheme in advance. To settle the loan, students must pay the remaining unpaid loan balance and any accrued interest on the loan.
When repaying the loan, students are required to repay the full loan amount, including any interest that accrues after the study period.
