If you’re wondering whether NSFAS is a bursary or a loan, you’re not alone.
This question arises because the funding provided by NSFAS has aspects of both.
In this article, we will explore NSFAS in detail, answering your questions and explaining the differences between a bursary and a loan.
What is NSFAS?
NSFAS is a government initiative designed to assist students from disadvantaged backgrounds.
It aims to provide financial support for tuition, accommodation, and other study-related expenses.
NSFAS funding helps students who meet certain academic and financial requirements.
Is NSFAS a Loan?
Technically, NSFAS is considered a loan.
However, there are unique aspects of this loan that distinguish it from traditional loans.
If you are awarded NSFAS funding, you will be required to repay it after you graduate.
The repayment process is income-driven.
This means you only begin to repay the loan once you start earning above a certain threshold.
Is NSFAS a Bursary?
Although NSFAS funding operates like a loan in many ways, it also shares characteristics with a bursary.
In particular, if you meet specific criteria, part of your funding may be converted into a bursary.
This happens if you successfully complete your course in the minimum time required.
If you fail to meet this requirement, the funding you received may remain a loan that you need to repay.
What is the Difference Between a Bursary and a Loan?
A bursary typically does not require repayment, especially if the conditions set by the sponsor are met.
In contrast, a loan is a form of financial assistance that you are obligated to repay, usually with interest.
NSFAS operates as a loan but can turn into a bursary if you meet certain conditions, such as completing your studies within the prescribed time frame.
Do You Have to Pay Back NSFAS?
Yes, you will need to pay back NSFAS funding once you start earning an income above the required threshold.
However, unlike most traditional loans, NSFAS offers flexible repayment terms.
The amount you repay depends on your income and ability to pay.
What Happens if You Don’t Repay NSFAS?
If you fail to repay your NSFAS loan, you may face legal action.
NSFAS has the right to take legal steps to recover the money owed.
Additionally, your credit score could be negatively affected, making it more difficult to access loans in the future.
How Does NSFAS Repayment Work?
Repayments are based on your income after graduation.
The amount you repay is calculated as a percentage of your income.
This ensures that repayment is manageable and tied to your financial situation.
If you earn less than the threshold, you will not need to make any repayments.
However, once your income exceeds the threshold, you will begin repaying your loan.
Is NSFAS Available for All Courses?
NSFAS funding is available for students studying at public universities and Technical and Vocational Education and Training (TVET) colleges in South Africa.
However, not all courses are covered by NSFAS.
It’s essential to check whether your course is eligible for funding before applying.