NSFAS presents new loan scheme to the USAf Board of Directors

Published On: 25 March 2024|

Vice-Chancellors of South Africa’s 26 public universities were last week engaged on the Government-launched loan scheme earmarked for students not qualifying for the full bursaries already administered by the National Student Financial Aid Scheme (NSFAS).

At the first ordinary meeting of Universities South Africa’s (USAf’s) Board of Directors on 19 March, senior NSFAS officials were invited to brief vice-chancellors, mainly on funding related operational matters as universities approached the end of the first quarter of the academic year.

Mr Barry Nkgabe (left), Senior Manager: Strategic Enablement at NSFAS, unpacked the loan scheme targeted specifically at the so-called missing-middle – the category of students whose total annual household income is above the R350,000 threshold that would qualify them for the NSFAS full bursary, and yet is below R600,000. This is the category of students who, in the absence of alternative funding sources — and unable to raise study loans– struggle to keep up with their university expenses and, invariably, either drop out, or exit the system in debt.

Principles governing the loan scheme

Students may apply for the loan to enrol at either undergraduate or post-graduate study programmes. The loan scheme gives precedence to students seeking to enrol in Science, Technology, Engineering and Mathematics (STEM) related qualifications – in line with a set principle of 70-30 in favour of STEM disciplines. Only 30% of available loans may fund students destined for careers in social sciences and humanities. Once the loan has been approved for study in one particular programme, the student must see that programme to completion. Switching to a different study programme not approved for the loan will lead to a withdrawal of the loan and cessation of funding.

Mr Nkgabe said NSFAS uses the annual combined household income as a guideline in the assessment of loan applications. Once a beneficiary has accepted the NSFAS loan, they are obliged by law to pay back the loan in monetary terms stipulated in the loan agreement. The study loan is payable once the graduate has found employment. Graduates are given 60 months to repay, from the date of securing employment.


Only South African citizens and permanent residents carrying South African identity documents may apply for the NSFAS loans. Nkgabe said students who unsuccessfully apply for the bursary scheme will automatically be considered for the loan scheme. Students receiving non-NSFAS loans, bursaries or scholarships will not receive NSFAS loans. Only students intending to study at public universities or vocational education and training (TVET) colleges may apply for the NSFAS loan. Students enrolled for qualifications that are not on the identified list for loan funding will not be considered for funding.

Once an application has been submitted to NSFAS, the turnaround time to the first response is 45 days, whether that response is to acknowledge receipt of the application or to request more supporting documents. NSFAS is working towards reducing this turnaround time.

According to the NSFAS officials, each eligible student is required to sign a pre-agreement and quote, and once approved, must accept in writing and sign the NSFAS loan agreement form.

The loan amount, and conditions

The total value of loans offered is subject to the available budget. The loan is limited to study related costs such as tuition, accommodation & learning materials. It does not cover transport and personal care costs, which are for the account of the student’s parent or guardian. Even though the loan is interest-free for the study duration, it begins to bear interest as soon as the graduate exits university.

Students who do not accept their loan offer within 30 days are assumed to have declined the loan. Students who change institution types (from a public university or TVET college to a private higher education provider) will no longer qualify for funding. Students are funded for one qualification at any one time and a student who no longer complies with the university N+1 or TVET N+ rule may not receive a loan. Parents or guardians are required to sign a surety for the loan.

Successful students are not liable for registration fees. A student is required to maintain a 60% academic performance to keep the loan. Achievement of 70% average in registered modules and completion of one’s studies in record time will qualify the student for a 50% discount on the total loan amount.

The loan will, however, be immediately payable if:

  • a student is found to have been dishonest or materially inaccurate in stating his /her situation in the application;
  • the preferred institution refuses to register or admit the student;
  • the student receives other financial assistance in connection with the course of study;
  • the student is found to have breached any of the set guidelines;
  • the student fails to progress academically.

In the limited time there was for discussion, Professor Peter Mbati, Vice-Chancellor and Principal of the Sefako Makgatho University of Health Sciences asked whether a student stood to lose their loan if they switched mid-way from a BSc Biological Sciences to Medicine, as many students tended to do at his institution. In response, the Acting CEO of NSFAS said exceptions might be made – but that considerations would be made on a case-by-case basis.

The briefing to the Vice-Chancellors was the very first, since the announcement of the NSFAS loan scheme, earlier in the year.

Meanwhile, the USAf Office has organised another consultative session on same, online, with all Registrars and Chief Finance Officers of public universities this Tuesday, 26 March from 10:00 to 12:00.  Attendance is purely by invitation to the target group.

‘Mateboho Green is USAf’s Manager: Corporate Communications