Don’t qualify for NSFAS and can’t afford your child’s university education? Help is here

Last updated on 2nd November, 2023 at 12:14 pm

So, you don’t qualify for a government loan, and can’t afford the cost of your kids’ tertiary education? Here’s how you can navigate funding your child’s education.

Reading time: 4 minutes

In this article, you will learn: 

• What the ‘missing middle’ is.
• How one of the biggest investments you can make is in your child’s education.
• What financing options are available.

When it comes to higher education, the ‘missing middle’ refers to households who can’t afford to pay tertiary fees, but simultaneously don’t qualify for aid or support, like the National Student Financial Aid Scheme (NSFAS). In cases like this, prospective students are naturally faced with the question: what happens next?

Approaching the problem

“One of the biggest investments you can make is in your children, their skillset, and ability to earn an income one day,” says Jaco van Schalkwyk, Certified Financial Planner® at Plan-B BlueStar. “Ideally, this is something that should be planned for years in advance where interest works for you, not against you. In this way, once your child is ready for tertiary education, so are the funds needed to make it happen.”

You can use this calculator to work out how much you need to save each month to meet your financial goals.

But when your child reaches the point of pursuing an education and you don’t have the finances – a common dilemma in South Africa – you may need to consider taking out a loan.

Is taking credit worth it?

Ayanda Ndimande, Head: Strategic Business Development at Sanlam Retail Credits, says people often associate credit with being bad, but this isn’t always the case. “It’s important to consider what the credit is for,” says Ndimande. “You need to ask yourself: is there future value in it? And I think we can agree that yes, education can have future value.”

Secondly, she says, you must consider affordability and reliability. “Not only can loans have incredibly high interest rates, but there are also many unregulated lenders out there. The task here is to shop around and find the type of credit that works best for you to achieve your goals, without creating problems later down the line.”

For instance, student loans often have more favourable interest rates and payment plans compared to traditional bank loans. “Remember, once you’re finished studying, you’ll have to start paying the lender back. You want to set yourself up for success from the get-go.”

Additionally, Ndimande suggests doing your research. “Some universities and colleges have set up funds and loans to help students who find themselves in the missing middle. There are also independent funds that aim to address the crisis of the missing middle, so prospective students should also investigate aids like the Ikusasa Student Financial Aid Programme (ISFAP).”

Looking for a way to save more? The Sanlam Money Saver credit card is the only credit that makes saving possible. When you choose to commit to saving and shop at reward partners, you’ll earn 5% Wealth Bonus.

Always keep in mind…

If you need to go the route of credit, it’s important to keep costs as low as possible. “While your child may dream of going to a top university like UCT, Witwatersrand or Stellenbosch, the truth is there are many colleges that offer equally important courses that are affordable,” she says.

Van Schalkwyk also suggests speaking to a trusted financial planner who can help guide you in the right direction. “This is a significant point in time for any student and there is no reason you should do it alone.”

If you’ve got questions about saving for or funding your child’s tertiary education, book a meeting with a Sanlam financial planner today.