Can you get a private student loan if you have NSFAS?

While the public bursary is designed to be comprehensive, some students seek private credit to cover costs that exceed the standard allowance caps.

In the local financial market, several major institutions offer specialized student loan products.

However, because the bursary is a non-repayable grant and a loan is a debt-bearing instrument, students must understand the technical requirements and the specific lenders available.

Step 1: Identifying Major Private Lenders

Several established banking institutions provide student-specific credit facilities. These loans are typically used to bridge the gap for expensive private accommodation or high-end specialized equipment.

Key institutions offering these products include:

• Standard Bank: Offers a comprehensive student loan that covers tuition, books, and accommodation.
• Absa: Provides a Study Loan with competitive interest rates, often requiring a parent or guardian to act as a principal debtor.
• Nedbank: Offers credit specifically for studies, with the option for “interest-only” repayments during the period of study.
• First National Bank (FNB): Provides student funding solutions that can be managed via their digital banking platforms.
• Fundi: A specialized education finance provider that focuses specifically on tuition, devices, and accommodation.

Step 2: Understanding the “Double Funding” Policy

It is a critical administrative rule that students cannot be “double-funded” for the same expense.

If a private loan from a bank like Standard Bank or Absa is used to pay for tuition, the institution’s financial aid office will record this.

If the public scheme also attempts to pay for the same tuition, the excess funds are generally returned to the scheme. Students should use private loans only for items not covered by the bursary to avoid administrative conflicts.

Step 3: Private Lender Eligibility Criteria

Unlike the public bursary, which is based on financial need, a private loan is based on creditworthiness.

• Sponsorship/Suretyship: Since most students do not have a fixed income, banks require a co-signer (usually a parent or guardian) who earns a minimum monthly income (typically R3,000 or more, depending on the bank).
• Interest Rates: Interest starts accumulating the moment the loan is disbursed.
• Repayment Structure: Usually, the surety pays the interest and service fees monthly, while the student begins paying the capital amount after they graduate or stop studying.

Step 4: Managing the Disbursement Process

When a loan is approved by a provider like Fundi or a commercial bank, the disbursement process follows a specific technical flow:

1. Direct Payment: Most banks pay tuition and accommodation directly to the institution or the accredited landlord.
2. Lump Sum for Equipment: Allowances for books or laptops may be paid directly into the student’s bank account.
3. Proof of Registration: Banks will not release funds until they receive a valid proof of registration and a fee statement from the university or college.

Step 5: Long-term Financial Implications

Entering into an agreement with a private lender means graduating with a legal debt obligation.

While the public bursary is a grant that does not require repayment (under current legislative rules for qualifying students), a loan from a commercial bank is a binding contract.

Students are advised to utilize the “Learning Material” and “Living Allowances” from the public scheme first before committing to high-interest private debt.

By analyzing the specific terms of both the public bursary and the private bank agreement, students can ensure their academic journey is funded sustainably without unnecessary financial risk.