What is the difference between a bursary and a loan?

Dealing with the financial aspect of tertiary education can be a little challenging sometimes.

And understanding the distinction between a bursary and a loan is necessary for making informed decisions about funding your studies at a TVET college.

Here, we will clarify the main differences between these two forms of financial aid.

What is a Bursary?

A bursary is a form of financial aid awarded to students to assist with the costs of their studies.

Unlike a loan, a bursary typically does not need to be repaid.

This makes it a highly sought-after option for many students.

Bursaries are usually awarded based on academic merit, financial need, or a combination of both.

Some bursaries are specifically targeted at students from disadvantaged backgrounds or those studying particular fields.

What is a Student Loan?

A student loan is a sum of money borrowed to finance your studies.

Unlike a bursary, you are obligated to repay the loan, usually with interest, after completing your studies or within a specified timeframe.

Student loans are generally easier to obtain than bursaries, as they are based primarily on your ability to repay the loan rather than your academic performance.

However, it’s important to consider the long-term financial implications of taking on a loan.

Is a Bursary Better Than a Loan?

The suitability of a bursary or loan depends on your individual circumstances.

A bursary is undoubtedly more advantageous as it does not require repayment.

However, bursaries are highly competitive and often have specific eligibility criteria.

If you are fortunate enough to secure a bursary, it can significantly reduce your financial burden after graduation.

However, if a bursary is not available, a student loan might be your only option to pursue your studies.

How Do I Apply for a Bursary or Loan?

The application process for bursaries and loans varies depending on the provider.

Some bursaries are offered directly by universities or TVET colleges, while others are provided by external organizations or companies.

Student loans are typically administered by government-backed financial institutions.

You must research the available options and meet the application deadlines.

Many bursary and loan applications require supporting documentation, such as academic transcripts, proof of income, and letters of motivation.

What Are the Conditions of a Bursary?

While bursaries do not require repayment, they often come with specific conditions.

Some bursaries may require you to maintain a certain academic standing, study a particular course, or work for the sponsoring organization for a specific period after graduation.

You need to carefully read the terms and conditions of any bursary offer to understand your obligations.

What Are the Repayment Terms for a Student Loan?

Student loan repayment terms vary depending on the lender and the type of loan.

In South Africa, the National Student Financial Aid Scheme (NSFAS) offers student loans with flexible repayment options.

Typically, you start repaying your student loan after completing your studies and securing employment.

The repayment amount is calculated as a percentage of your income.

How Can I Increase My Chances of Getting a Bursary?

To increase your chances of securing a bursary, focus on academic excellence and engage in extra-curricular activities.

Building a strong academic record demonstrates your potential and dedication to your studies.

Also, participating in community involvement or leadership roles can enhance your bursary application.