Wednesday, 11 June 2014
Student loans were developed to help poor or previously disadvantaged students access higher education, but is this a sustainable system for administering funds to young people?
Over R 9 billion in loans and bursaries has been made available through the National Student Financial Aid Scheme (NSFAS).
This may solve the financial aid problem in the shorter term but Biz Community reports that the scheme has, for years, been struggling to recover money owed to it, with students repaying only about R400m a year.
It seems that South African students are heading down the same debt ridden road as their UK and US counterparts. This is particularly worrying in light of the high unemployment rate.
Unfortunately for many students the only way into a higher education institution is through a student loan contract.
John Marsden, National Sales Director of PPS, a financial services provider for graduate professionals says some graduates stop paying the loan as they try to find employment. If you are one of these people make sure you practice responsible lending.
Marsden suggests that graduates draw up a budget as soon as they graduate, including a payment schedule that would result in the loan being paid off within four years.
He also warns students not to terminate repayments while they are looking for employment.
“…It is better to arrange a repayment solution and not stop making payments completely," Marsden said.
For more information or to take out a loan visit PPS website
What do you think?
Are you managing your student loan?