Reducing Your Student Debt - The Road to Repaying A Student Loan

Reducing your student debt, student loans, paying nsfas loans, student debt,

Tips for reducing your student debt

15 Mar 2019 LIFESTYLE

By Nomali Cele

Education is expensive. Most people are not privileged enough to be able to save for their children’s education and in turn, hundreds of thousands of graduates are in debt by the end of their studies. In fact, the number of South African students who don’t graduate or have their results withheld due to outstanding fees is high.

Before you can think about reducing your student debts, know that different student loans have different repayment expectations. Private institutions expect that part-time students repay their students loans as they study. Private institutions also expect that repayments begin immediately if a student has failed to complete their studies. NSFAS, on the other hand, requires repayment when you start working.


Reducing your student debt – Don’t take more than you need

It can be tempting to take the maximum amount of money you can but discipline at this stage will pay off later. Whether you are getting your student loan through public funding or through a private bank, the smaller the amount you take the better.

Outline your financial needs for your studies and see which parts can be paid for without the student loan. Do you need to fund tuition, accommodation, books AND meals or can you subsidise books and food by working part-time or through parental help?

Reducing your student debt, student loans, paying nsfas loans, student debt,

Reducing your student debt – Be diligent in your repayments

Get cracking with your student loan repayments as soon as you can. It may seem like a good idea to put it off until you get on your feet at your first job but get started with repayment, but it’s not.

If your student loan is with an organisation like NSFAS, the repayment terms are quite reasonable. You are required to start repaying when you make R30, 000 or more annually. When you make above R59, 300, you will be required to make repayments of no less than R395 monthly towards your student loan.

When you hit the ground running early with your student loan repayments, you are doing yourself a favour because the longer you put off reducing your student debt, the bigger it balloons due to interest.

Reducing your student debt – Be communicative with your lender

Things happen! You can lose your first job or find yourself unable to work for whatever reason, it’s important to stay in touch with your student loan holder once you’ve started the process of reducing your student debt.

Reducing your student debt – Go above and beyond

Minimum payments are great as they are there to accommodate your financial means. But it’s better to always pay much more money than the required whenever you can. For instance, if you get a bonus, a portion of it can be used as a lump sum repayment. Part of a stokvel? When it’s your turn to get paid, put that money towards reducing your student debt. These payments can cut your repayment period, which can lead to saving on interest.


Want more tips for reducing your student debt? Listen to My Money And Me’s Thuli Magubane in conversation with “Financial Fitness Bunny” Nicolette Mashile about reducing student loans.

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