Rapid increase in number of student loan applications

20 December 2013 - Which Way To Pay

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Sharp spike in number of students applying for student loans

Banks have seen a rapid spike in the number of students that are applying for student loan finance for their studies as young people commit to improving their skills in the hope of securing a job when they graduate.

Students seeking loans of R50,000 mainly towards studying for a diploma

The rise in bank application is above the R8.5 billion in loans and bursaries that the government have on offer to 400,000 university and training college students. Chief executive of FNB personal loans Pieter du Toit said that the majority of the increase in loan applications was from first-year students.

"A higher education is critical for a child’s future employment and career opportunities. This is not limited to typical academic qualifications, but includes growing numbers of students seeking diplomas in high-demand areas such as trade skills and specialist computer skills. Very often these students and their families struggle to purchase laptop computers, specialist equipment and books," Du Toit said.

25 per cent spike in student loan applications

Standard Bank reported a 25 percent spike in student loan applications, attributing this to the rising grade 12 pass rate. It received 46 172 applications. Most applications were from Gauteng, with 14 percent from KwaZulu-Natal. Most were studying towards a four-year qualification and, on average, seeking loans of R46 000. Students had to pay back the loans only when they had jobs and earned more than R30 000 a year.

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