Students scramble for loans
Banks have seen a sharp spike in the number of students applying for finance for their studies as young people commit to improving their skills in the hope of getting a job when they graduate.
The rise in bank applications is over and above the R8.5 billion in loans and bursaries offered by the government to 400 000 university and training college students through the National Student Financial Aid Scheme.
FNB said students were seeking loans of, on average, R50 000. Most applicants were from Gauteng, and studying towards a diploma.
Chief executive of FNB personal loans Pieter du Toit said that most of the increase in study loan applications was from first-year students.
“A higher education is critical for a child’s future employment and career opportunities. This is not limited to typical academic qualifications, but includes growing numbers of students seeking diplomas in high-demand areas such as trade skills and specialist computer skills.
“Very often these students and their families struggle to purchase laptop computers, specialist equipment and books,” Du Toit said.
Standard Bank reported a 25 percent spike in student loan applications. It received 46 172 applications. It attributed the growth to the rising Grade 12 pass rate.
Most applications were from Gauteng, with 14 percent from KwaZulu-Natal. Most were studying towards a four-year qualification and, on average, seeking loans of R46 000.
Absa’s head of retail banking, Arrie Rautenbach, said that, compared with last year, the bank had received 28 percent more student loan applications – 70 percent of which had been granted.
Most applications were from Gauteng students, with 8 percent from KZN.
Since 1991, the National Student Financial Aid Scheme had awarded R32.8bn in loans and bursaries to 1.4 million students who had not been able to secure funding elsewhere.
Students had to pay back the loans only when they had jobs and earned more than R30 000 a year.
Depending on how well a student did at their studies, up to 40 percent of their loan could be converted to a bursary.
However, the scheme had unpaid loans of R6bn, and had not been able to keep up with demand – resulting in student protests on KZN campuses.
A study released by the University of Stellenbosch this year found that students funded by the scheme were more likely to graduate than those who were not.
The scheme is piloting a new student-centred model in selected universities and colleges next year, including the Durban University of Technology and the Umfolozi College on the North Coast.
In the new model, students can apply directly to the scheme’s centralised system for financial aid, instead of at a tertiary institution. - The Mercury