If you thought life got easier after matric, think again. University is a whole other ball game. If you want to reach your dream (and your degree), you’ll need to do more than attend all your lectures and study for all you’re worth; you’re going to have to find a way to finance your university experience too. Aside from the ludicrous tuition fees from the university of your choice, you’ll need to stock up on all the required reading. And finding an affordable place to live. And finding a means of transport if you live a distance from campus. This sounds like a lot of pressure (probably because it is), but there are ways to take the financial pressure off to some extent. Students have a variety of financial options on hand. Top of the list for a lot of folks are scoring a bursary or being approved for a personal loan or student loan.
Bursary: Pros and Cons
There’s a lot of various when it comes to bursaries, but they generally fall into two categories. On the one hand, you can apply for a bursary from a company dealing in your field of study. In return for sponsoring your tuition, the company may require you to repay them by signing a work contract with them and working hours with said company either during your studies or for a few years after you’ve earned your degree. The other type of bursary is known as a donor bursary. This is much like a scholarship in that it is awarded to a deserving candidate in a specific field of study or in recognition of a student’s overall academic achievement. This second kind of bursary doesn’t require you to repay a company in any form.
However, the downside to a bursary is that it often doesn’t cover much more than your tuition fees. Some companies will also cover the cost of your textbooks, but there’s no guarantee. More often than not, companies offering bursaries fail to consider the cost of the student’s transport (both to university and to work) as well as their accommodation (rent doesn’t pay itself). The student in question may find he or she may have to take on an extra job on top of their responsibilities to the company (not to mention their studies) in order to make ends meet. That said, you may be able to talk these issues through with the company you apply to for a bursary; it certainly wouldn’t hurt to ask.
Personal Loan: Pros and Cons
When considering any kind of loan, you will mainly want to look at the interest rate. In this case, a personal loan will have a higher interest rate than your typical student loan, but a much lower interest rate than that on a credit card. That said, the interest rate on a personal loan is somewhat easier to negotiate as it is based on your credit score.
Of course, as a young student fresh out of high school, you probably wouldn’t have much of a credit record at this stage. However, your parents may be able to take out a personal loan for your studies, if they want to support you in your studies, but aren’t financially able to. If they have a decent financial history themselves, they may be able to get a personal loan at a more reasonable interest rate. Otherwise, if you have been working a while and are looking to get a postgraduate degree or doctorate, you may be in a better position to approach a credit provider for a personal loan with a lower interest rate.
If you (or your folks) take out a personal loan to fund your studies, you will have to pay back this loan on a monthly basis over a fixed period. These details are written in the agreement drawn up between you and your credit provider. This kind of stability can help you budget in advance, a skill that will serve you well after you’ve left university.
Student Loans: Pros and Cons
With a student loan, you might think you know what you’re getting yourself in for. After all, aren’t these loans facilities and financial institutions set up with students in mind? While this type of loan often seems the finance-friendlier option to the uninitiated, you have to remember that like any credit provider, those bank and organisations kindly offering to fund your studies still have to make some money back.
Student loans are designed to help pay your tuition fees as well as associated fees like your textbooks and living expenses (i.e. transport and accommodation). This option sets itself apart from other loans with considerably lower interest rates and the person taking out the loan only has to begin the repayment process once the student has completed his or her studies. This flexible repayment structure makes this the go-to choice for a lot of young students fresh out of matric.
However, be sure to check the fine print on your student loan. Some credit providers expect you to start paying back the interest on your loan, while you are still studying. The rest of your loan would still be due after you finish your studies – whether you graduate or fail.
So, in review:
- Personal loans: Potentially not the best option for people straight out of matric. However, if you have a good credit score on your side and are looking to fund some post-grad studies, a personal loan could be a great option for you in the long run.
- Student Loans: For the freshly matriculated, a student loan could prove the more feasible option.
- Bursaries: The best deal is probably the bursary, since you don’t have to #PayBackTheMoney. But there’s no guarantee that the company sponsoring your studies will also sponsor your accommodation and transport.
The trick is to think ahead. Don’t make the mistake of committing to too many other credit agreements, while you’re studying or even for a while after studying. Make paying off your student loan your top priority when you enter the workforce. By staying on top of your loan repayments and paying your debt off as fast as possible, you can come out the other side of your debt with a stronger credit score, which could pave the way for better interest rates in the future.
Alternatively, you could consider the cheaper and equally respectable option of a trade school – for a university experience that’s just as nice for a lesser price!