Student Loans – What Parents Need to Know

Funding your child’s tertiary education as well as figuring out how to apply for funding can be stressful. Thankfully, banks offer you a solution. Student loans are a great option to fund your child’s studies!

The Problem

As high school draws to an end for your child, preparing for their next chapter is taking center stage. One of the stressful tasks includes solving the ‘how to apply for funding’ question. Today’s standard of living has made independently preparing for this very moment an impossible effort, but fret not.  There are options available to assist in helping your child fulfill their dreams. Let’s explore student loans as a possible avenue.

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EVERYTHING YOU NEED TO KNOW ABOUT STUDENT LOANS IN SOUTH AFRICA

How to Apply for Funding

Your child’s education is important, but the question remains: how to apply for funding?  The student loan route is definitely a viable option for funding your child’s education. In order to be successful in applying for the loan, the applicant must be a South African citizen or living in South Africa permanently, and earn more than R3 000 a month.The student is also required to be based in South Africa.

The loan can be in the name of one of the following:

  • A parent, who has proof of income

  • A sponsor/guardian, who has proof of income

  • A part-time student, who is employed full-time and has proof of income

All banks require a surety to sign for the student loan.  This is usually the person who will be applying for the loan and who will therefore also be liable for the costs involved.  It is important to note that financial responsibility falls on the person signing surety.

Surety? Please explain…

A surety is a promise by one party (the surety) to assume responsibility for the debt obligation of a borrower (e.g. the student) if that borrower defaults. The person or company providing the promise is also known as a “surety” or as a “guarantor”.

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FIND OUT HOW TO APPLY FOR A STUDENT LOAN

One more time for Big Fudge?

Basically, banks need someone in a financially stable position to sign a guarantee that they can pay the loan back if the student, or borrower, cannot. It’s a way for the banks to make sure they aren’t left without money at the end of the loan.

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Taking on a loan is a massive responsibility that requires careful consideration from all parties. However, a loan can be a helping hand when it comes to financing all or part of your child’s studies. Find more information about finding funding here!