You are in : Education

Student Loans

Students still need to repay loans

Tue, 11 Jan 2011 15:40

Statements made by President Jacob Zuma recently relating to student financial aid in no way discouraged students from paying back the loans they owe to the National Student Financial Aid Scheme (NSFAS).

We welcome the President’s announcement of the significant future growth plans for the educational sector of this country, in support of the work of the NSFAS.

There appear to be some confusion regarding the announcement on the status of existing and new NSFAS loans and the responsibility of students to repay their debt obligations.

Says Ashley Seymour, the CEO of NSFAS,"I would like to clarify some matters relating to this and confirm that the current procedures and requirements of the NSFAS will continue as previously advised and remain applicable".

"All students applying for financial aid will still be required to complete the necessary forms that the university or FET College requires of applicants as advised by the Financial Aid Offices at the Institutions and Colleges.

“Furthermore, students obtaining a NSFAS loan remain contractually bound by the terms of their loan agreement, and will be expected to repay their loan when they meet the requirements for repayment – that is, when they are employed and earning a minimum of R30 000 per annum. This applies equally to existing NSFAS loan recipients and those still busy repaying loans from previous periods.”

In his announcement, President Zuma further explained that: “With effect from this year, 2011, students who are registered at a public university in their final year of study and who qualify for funding from the National Student Financial Aid Scheme, will receive a loan equivalent to the full cost of study, which is the full fee and the necessary living expenses.”

If these students graduate during the 2011 academic year, their loans will be converted into bursaries. “They will not have to repay the amount,” President Zuma explained.

If they do not graduate, however, then the award remains a loan which will have to be repaid to NSFAS.

Seymour further explains that it is important to distinguish that only the loans awarded to final year students in their final year and who qualify for NSFAS funding will be converted to bursaries on successful completion during 2011.

Should any of these final year students have any loan outstanding for loans in preceding years, these loans per their terms and conditions remain repayable.

The NSFAS also welcomes the announcement by the Minister of Higher Education & Training, Dr Blade Nzimande, of additional funds to assist students in the 2011 year. “The focus on scarce skills and rural students will address particular issues in the most meaningful way possible,” he explains.

“NSFAS will continue to strive to assist as many needy students as possible with financial aid,” Seymour continues.

“Our approach is to recommend to universities that the award they grant to the student should cover the tuition cost, accommodation cost, books and food costs for a student identified as a NSFAS beneficiary.”

In this regard, the recommended maximum award for the 2011 academic year amounts to R54 000. Applicants are tested for financial need and, based on the result, a really needy student should ideally receive this amount to cover all the costs associated with one year of study.

Seymour reiterates the importance for previous and current NSFAS beneficiaries to repay their loans and further contribute to the nation.

“These amounts are returned to the pool of funds made available to assist future generations of needy students. This core function of NSFAS makes it possible for many more underprivileged youth to receive funding to pursue tertiary education and thus it remains a high priority for current debtors to pay back their loans to ensure that future generations of students are similarly assisted.”