Tag Archives: student loans

How to manage your student debt and loans

Student debt management
A new year has begun and time to make some new year resolutions. If you are reading this, it is a fair to say that you are a student with a student debt hanging over your head. Do you feel that you are making no progress with your debts? Do you feel stuck dealing with the same student loan month after month and getting nowhere? Do not despair, if you are willing to exercise some creativity you can reduce your debt much faster than you think.

Over the last few years, student debt is one of the only forms of debt that has grown eclipsing auto loans and credit cards. In many cases, students do not understand the gravity of their student debts and how to manage this debt. Most students who have taken out student loans are very aware of their debt burden and are always seeking out guidance on how to manage their student debt.

When it comes to managing your student loans and debts, by far the best approach is remain calm and think logically about how you can reduce your debt. Take a step back and look at your debt burden from different vantage points, make a list of your obligations, think about your objectives, and always remember that there are always options.

With a new year starting, here are few ideas to help all those student with debts to start the year on the foot and tackle their student debts and loans head on.

  • Always have a positive attitude. Achieving any goal requires determination and a feeling that you can succeed.
  • Make a list of all your debts with the highest listed at the top.
  • Make sure you understand your loan conditions and requirements, make a plan and create an accurate repayment schedule.
  • Look to study at a college that assists you to rely less on student loans.
  • Be realistic and know your limits. Don’t borrow more to get your degree than the salary you can reasonably expect to make in your first year out of school.
  • Contact your lender and inform them that you wish to prepay your loans and reduce your interest payments.
  • Set up an automatic payment system to avoid missing any payments.
  • Pick a student loan and repayment plan that suits your needs.
  • Double your student debt payments cut your student loan faster. with any extra cash available, try repay your debt principal.
  • While you may want to spend your paycheck on a nice big place of your own, living frugally and somewhere affordable is the best way to save money – money that could be directed to paying off your student loans.
  • Check with your accountant or tax planner to see if your loans are tax-deductible.
  • Make a budget and start living below your means. The key to any sound financial planning is to spend less that make and save the difference.
  • Consider asking your employer if they would be willing to include student loan repayment reimbursement as part of your benefits package.
  • If you are fortunate enough to own a home with some equity, try to refinance and benefit from the potentially lower cost debt that may be tax-deductible.
  • It might seem obvious, but try to pay more than you are required to each month and reduce your loans faster.

Paying back your student loans can be intimidating but don’t freak out. Believe in yourself and understand that you can pay back your student loan even if it takes a little time.

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NFSAS News 24 Survey

Student protests around the country over the past week or so have really captured the imaginations of South Africans and raised conversations and debate around funding for education. But the protests and concerns, as we know, are not new. Many university students and particularly previously black-only institutions have been decrying financial exclusion fees and other issues for years now.

NSFAS (National Student Financial Aid Scheme) – its working, its funding, its ability to get money back from loans granted in the past – is also coming to the fore once again. It’s the National Student Financial Aid Scheme. They’re currently giving aid to just over 420 000 students a year.

Have you had any dealing with NSFAS? We want your feedback. Whether good or bad, what’s been your experience of the NSFAS financial aid programme?

To complete the News24 2-minute survey – CLICK HERE

Bursaries available for Mpumalanga Students – only need to apply

bursary application

 

Mpumalanga Provincial Government is offering bursaries to grade 12 students to further their education in South Africa. The Mpumalanga Education Department is urging all students who require financial assistance to apply for bursaries to various universities within South Africa to so before 30 September 2013.

All students need to do to qualify for a bursary is to complete the  application form which are available at the provincial government complex in Riverside Mall in Mbombela or any regional Education Department offices. Bursary application forms are also accessible via the education department’s website – CLICK HERE

The Mpumalanga Provincial Government Bursary Scheme for the 2014 is controlled by the local Mpumalanga Education Department. The local government centralized all bursaries and will administer all bursaries and application directly from the department.

All applicants for 2014 bursaries need to complete the application form and submit the following documentation:

  • Certified copies of their Grade 12 mid-year results if they are currently in Grade 12
  • Certified copies of their Grade 12 final certificate if they have completed Grade 12
  • Proof of residence
  • An acceptance or provisional acceptance letter or proof of registration from a higher education learning institution
  • Certified copy of their South African identity document
  • Proof of income of their parent(s) or guardian(s)
  • Proof of disability from a registered medical doctor or clinic/hospital (if applicable) and/or proof of indigent status.

Students are also encouraged to seek out other further education and training opportunities provided by the government in order to asset them to obtain a university qualification. Bursaries and other information for students who require financial assistance to further their education is available from Fundza Lushaka Bursary Fund and the National Student Financial Aid Scheme.

Source: SAnews.gov.za

Student loan debt reaches $1.5 billion and climbing

Current student loan financed by the National Student Financial Aid Scheme (NSFAS) for tertiary education at the moment stands at R13.4 billion (US$1.5 billion) in delinquent loans it has been revealed by South Africa’s Higher Education Minister Blade Nzimande. Somewhere around 20% of students who took out loans are yet to pay a single cent towards their debt repayment packages.

The Minister has stated that recovering the capital sum is a priority of the education department and has encouraged the South African Revenue Service (SARS) to get involved and  garnish money from defaulters’ salaries.

NSFAS has publicly stated that it is lacking the relevant skills to recoup loans and that the scheme is not proficient at recovering debt. NSFAS has told parliament that only 5% (R638 million) of the total long-term debts has been recovered as at the end of 2011 which stood at R12.2 billion.

In spite of the delinquency rate of students loans, Nzimande has applauded the NSFAS scheme as “a feather in the government’s cap”. In 2012, R5 billion in students loans was granted and that since the scheme’s inception in 1999 more than R19 billion has been disbursed.

 

Student financial aid 1

 

Background of Student Loans

Higher education in the country has demonstrated and plays a crucial role in boosting the economy and contributed towards developing a wealthier society by producing highly skilled graduates.

The intention of government is to boost the annual university enrollment from 900,000 to 1.5 million by 2030 and realize their objective of a 23% higher education participation rate.

In January of 2012, a Green Paper was published setting out the goals and objectives of government pertaining to post-school education and training, with a target of generating  4 million students by way of colleges and other post-school institutions.

Currently, the country has a 16% participation rate of adults aged between 18 and 24 in comparison with a global average of 30%.

To be able to open access to  higher education and increase the number of students, it is vital that a student loan and bursary scheme remain in existence and promoted. In 1994 there were merely 495,000 students annually registered for university education. In 2012, this number stood at 900,000.

The current loan and bursary scheme has a stated objective to provide a sustainable educational funding system for student loans and bursaries and making it possible for academically deserving and financially needy students to realize their potential. The goal is to “make a difference in our land” – a key goal for a deeply unequal society.

The principal way whereby poorer students can obtain access to higher education is via the nation’s grants and loan scheme. Based on reports from the NSFAS, students loans and granted supported something like 32% of all university students in 2011.

 

Student financial aid 2

 

Access to and repayment of student loans

Based on Absa’s head of transitional banking,  Harriet Heymans, the bank estimates that a further 25% of students make application via other commercial institutions to obtain student loans to finance their studies.

In the USA there are reports and statistics proclaiming that the current student debt exceeds $1 trillion and that it takes somewhere around 10 years for individuals to repay their students loans after entering the work force. There are concerns that South Africa may very well be heading in the same direction.

As opposed to the USA, South African banks are well regulated and force lenders to comply with the National Credit Act and Consumer Protection Act. It is precisely these acts and laws that will prevent the country from entering an education loan crisis.

The National Credit Act and Consumer Protection Act assists to protect and support students. Making sure that loans are repaid within a specific time frame, all student education loans are registered in the names of the students parents  or in the case of part-time workers the student themselves.

Ensuring that students loans are repaid has additionally been backed up by Wits University Vice-chancellor Loyiso Nongxa who has expressed that it is crucial  that loans are repaid and that the non payment of loans goes beyond a mere resistance to honoring the debt.

Beside the undeniable fact that there currently exists a high level of graduate unemployment; there also exist the issue where students who are granted loans however do not graduate and find it difficult to seek out employment and repay their debts.

Even if a student drops out of college or university they are still liable and accountable for their debt. South African Students Congress claims that this figure is roughly a third of all students who have received loans.

According to NSFAS student loan terms and conditions, it specifically states that students who receive loans have a primary responsibility “to repay the confidence shown by studying hard, graduating and [entering] the workplace”. Thereafter, the loan has to be repaid.

In spite of this, currently students are only obliged to repay their debt once they have found employment and their salaries exceed R30,000 annually. Once this threshold has been achieved students are obliged to pay 3% of their annual salary increasing to a maximum of 8% upon attaining a salary of R59,300.

Nzimande is also committed to retaining the current policy whereby hard studying reduces the loan element, converting up to 40% of the borrowings into a non-repayable bursary which is dependent on the year-end academic results. The NSFAS annual report shows that at the present time this loan-to-bursary conversion translates into 15% of the current total student loan debt.

As reported by Business Day the country spends far too little on tertiary education. Current spending indicates that the current budget of R31 billion or 13% of the total education budget. The student loan system is trying to resolve two contradictory tendencies by, in essence, hoping to get more individuals into university while at the same time trying to maintain a constrained budget.

“The problem is complicated by a high dropout rate, which renders some of the spending ineffective,” – Business Day.

 

Education savings

 

Resolving the problem

Finding a solution to the students loans and grants issue is no simple task. The NSFAS is unable to say with 100% confidence whether or not the capital on student grants and loans will be repaid. There is a trend whereby students begin repaying their loans however in time become untraceable or end up in informal employment. The same holds true for those students who fall below the earnings threshold.

Furthermore, there is doubt whether or not debts will be repaid considering that that this depends on the reality that when students exit the tertiary will they find employment and what will their annual earning be. Also, will the scheme have the ability to monitor and keep track of students who are granted bursaries and loans; not forgetting the effect of inflation which also impacts the student loan. A loan of R10,000 currently does not translate into the same buying power for that capital three years hence. Add to that equation the reality that the scheme charges an interest rate equivalent to 80% of the repurchase rate, presenting a considerable discount to commercial interest rates.

Career Wise MD Monique Adams has stated that she is also wary of the loan problem and believes that there is an ever increasing debt problem in South Africa with more and more students taking out loans.

“The problem will not go away, but will increase as more students take out loans,” she concluded.

Teaching bursary to promote maths and science

 

 

The recruitment and training of teachers in the vital subjects of maths and science is set to receive a significant boost as a result of a venture established by the Department of Basic Education in a joint venture with the Independent Schools Association of South Africa (ISASA) and Investec.

By way of this collaboration, the department has created and adopted the “Teacher Assist Approach” programme, which it will implement when recruiting and placing new teachers in vital  subjects that include Mathematics, Science and English.

The department, ISASA and Investec unveiled this historic public-private partnership with the aim of training 200 teacher interns in the priority subjects. The teachers are going to be trained at independent schools bertween 2013 and 2020.

The programme will employ the combined resources to develop quality teachers in Maths, Science and English. The department will provide for the total study and subsistence costs of the teachers for the period of their training via the Funza Lushaka Bursary Scheme.

ISASA schools will host, train and mentor the interns. The group will in addition manage the programme which will involve recruiting, selecting and placing prospective teachers, as well as supporting them throughout the period of their internship, which will take between 3 and 4 years.

Investec is expanding it’s support at school level and is extending its focus to the vital need to develop high quality teachers in the key subjects of maths and science. Its function will in addition see them make available capital for enrichment activities for instance the orientation of the new recruits, academic support along with hosting of mentoring meetings.

Basic Education Minister Angie Motshekga mentioned, in line with the education strategy – Action Plan to 2014: Towards the Realisation of Schooling 2025, the department was in fact making an effort to boost the supply of young and qualified educators, especially for gateway subjects.

 

 

Basic Education Minister Angie Motshekga

 

“The Funza Lushaka Bursary Scheme is one way of [achieving this], hence our support for this initiative. This will help us in placing the just over 2 000 new graduates Funza Lushaka has produced over the last three years and in tackling current teacher shortages,” Motshekga said.

The day-to-day support of the recruits is going to be made available from the ISASA, which includes the ongoing evaluation of the recruits, to make certain that individuals who need additional support are actually identified and assisted appropriately. ISASA will be managing every aspect of the teachers’ development, utilizing the help and support of the department and Investec. It is anticipated that the training model could be the catalyst towards grooming the next generation of teachers.

The primary objectives and goals of the programme is to develop confident, competent teachers, along with a robust dedication to Maths and Science teaching as their lifelong profession. Undoubtedly, the multiplier effect associated with skillful teachers within these priority subjects is truly a major contribution to the teaching profession.

Suitable applicants are school-leavers with university entrance passes in addition to superior results in Maths, Science or English. Individuals with university credits or degrees in these subjects will also be among those benefiting from hte bursaries to study towards a teaching degree.

Investec representative Setlogane Manchidi encouraged interns to carry out some research, stating that ” he who doesn’t research, has nothing to teach. “Whatever you teach our children and allow them to discover about themselves will be the foundation upon their future,” Manchidi told the interns.

Transnet Foundation Senior Manager: Education, Theresa Vivian Moila acknowledged the reality that the teaching profession was in fact undervalued, however, it is not all “doom and gloom” and challenged the interns to revive and restore the excellence within the teaching profession.

“Be at the frontline to give learners requisition knowledge. You have to open doors of opportunities for learners and restore the love of learning. Become the village that raises children. Go out and conquer the world and touch the lives of learners and communities in a positive way,” said Moila.

Nomthandazo Dube from Tembisa, who feels that she was born a teacher, signed up with the programme  to acquire practical experience. “I want to find my feet first before going out to teach. My goal is to further my studies and do Education Psychology because it gives you the tools you need as an educator to understand the learner behaviour and how to respond in different situations.

Applicants for 2014, especially graduates wishing to access bursaries, can get application forms by contacting ISASA on 011 648 1331.

Source: SAnews.gov.za