Did you complete your higher education by taking an NSFAS allowance? Depending on when you receive the funds, you might need to pay them back. Continue reading to find out when you should start paying the allowance money back to NSFAS.
The National Student Financial Aid Scheme, or NSFAS, is a South African bursary scheme for financially weak undergrad students seeking tertiary education. The fund covers all of their expenses. But students must return the money as it is lent to them. The president brought some changes, and the scheme is now given as free education.
NSFAS Students Found Guilty
Unfortunately, students sometimes try to deceive NSFAS. They have warned students who fraudulently qualify for the allowance that they will have to face harsh consequences. Strict laws can result in the direct imprisonment of students if found guilty.
NSFAS accidentally sent R14 million to Sibongile Mani’s account in 2017. She was studying at Walter Sisulu University (WSU) and got an allowance of only R1400 per month for food allowance. East London Regional Court Magistrate Twanette Olivier found her guilty of taking R818000 from her account.
She was given a direct five years imprisonment for theft of NSFAS. She was given the right of parole after serving one-third of her sentence. This case is an example for those thinking about scamming NSFAS.
Do You Have to Pay NSFAS Back?
NSFAS Allowance as Free Education
Until 2017, students returned the money in easy installments to NSFAS. It was seen only as a loan, but the president changed it into a bursary system. Now all students receiving funds after 2018 do not have to return them. But if you took the funds before 2017, you must pay them back.
When do You Need to Start Paying Back?
NSFAS will not force you to return the money unless you have a steady income. The minimum income for returning the loan is R30000 per year. If you are not earning this much money, then you will get relaxation. Your source of income can be employment or your own business.
40% of the allowance is already a bursary. You will only return 60% of the loan if you pass all your courses. If you are a final-year student, you can convert all your loans into bursaries if you pass all final-year courses and graduate.
If students do not graduate and leave their education without completion, they will still have to return the loan to NSFAS.
The returning policy is not burdensome for students as their monthly installment depends on their monthly average income. The starting of repayment calculations is only 3% of your annual salary. But it can reach a maximum of 8% when your salary increases to R59300 or more per year.
If your salary is R30000 per year, you will be repaying a total of R900 annually or R75 per month. Similarly, this amount will increase with your salary. If you want to repay quickly by increasing the installment amount, you can do it.
NSFAS Repayment Interest Rate
There is a lowest interest rate of 3% per year salary of R30000—the interest rate increases by 1% for every increase of R6600 in your salary annually. So if your salary is 36600 per year, your interest rate will be 4%.
Ways to Repay NSFAS
You can start repaying NSFAS by electronic debit order. This way, they will receive money automatically, and you will not have to worry about the installment dates. You only need to download the NSFAS Debit Order form from nsfas.org.za. Fill the form in and send it to [email protected].
Electronic Fund Transfer (EFT)
You can also EFT money to NSFAS. Standard Bank, Capetic, FNB, and ABSA have NSFAS as beneficiaries in their lists. If you want to send EFT to NSFAS each month, the following are their bank details.
Name of Account: NSFAS
Branch Code: 210554
Bank: First National Bank
Account Number: 500 600 28203
when making payments, use your ID number as a reference
Apart from the above methods, there is a salary deduction method. You will need to download an employer deduction form from nsfas.org.za, fill it in and submit it to your employer. Your employer will then deduct the money from your salary to pay NSFAS.
What happens if you don’t pay NSFAS?
If a student does not repay NSFAS, they will take all the steps to recover their money like any other bank. They can take it to court and blacklist your credit for the future.
Do you pay NSFAS back if you fail?
Yes, even if you fail, you must return the money you took from NSFAS.
To conclude, NSFAS gives a very flexible repaying method. Students can repay monthly in small installments. Any fraudulent action can lead to bitter consequences, so clear all your NSFAS loans honestly.