Students funded by the National Student Financial Aid Scheme (NSFAS) do not need to make any repayment of student debt during the course of study.
This major benefit is just one of the many benefits that the students who were funded to tune of R10.5m, receive, according to the NSFAS 2016/17 annual report.
It lists other benefits such as:
- the conversion of 40% of NSFAS loans to grants if funded university students pass their first and second years of study
- the conversion of the total amount of the loan in the final year of study to a grant if funded university students pass their final year of study
- interest charges are deferred during the course of study, including 12 months after exit from a public university
- the funding to the TVET colleges is a full bursary, with no expectation for a repayment.
- Interest charged on outstanding amounts is heavily subsidised at 80% of repo rate.
This is a significant subsidy since the prime rate is typically 350 basis points above the repo rate.
In other words, if the prime interest rate is 10.25%, a NSFAS-funded student only pays interest of 5.6% on the outstanding loan.