The National Student Financial Aid Scheme (NSFAS) has recently released the 2025 Eligibility Criteria and Conditions for its Student Loan Scheme, providing crucial details on how NSFAS loan interest is calculated. This information is vital for students seeking financial assistance for their tertiary education in South Africa.
NSFAS offers comprehensive funding to eligible students pursuing approved courses at both Universities and Technical and Vocational Education and Training (TVET) colleges. This funding covers essential expenses, including tuition and registration fees, as well as allowances for food, accommodation, and learning materials.
With hundreds of students poised to benefit from these loans, understanding the NSFAS loan interest structure is paramount.
How Does NSFAS Loan Interest Work?
A key clarification from NSFAS is that no interest accrues while students are actively studying. Interest accumulation begins only 12 months after the student's exit date, which is defined as the date of graduation, dropout, or completion of their studies.
Loans are interest-free during the study period and will begin accruing interest 12 months after the student’s exit date.
The NSFAS loan interest rate is pegged to the prime lending rate as of April 1st each year, minus 100 basis points (1%). This means the rate is prime minus 1%.
- Interest accrues daily and is compounded monthly: This means interest is calculated daily and added to the loan's principal balance each month.
- In-duplum rule: To protect borrowers, the total accumulated interest will never exceed the original loan amount.
NSFAS Loan Repayment Details
Students are required to commence NSFAS loan repayments in their first month of employment. Repayments are made in monthly installments, covering both the principal loan amount and the accrued interest.
Early Settlement: NSFAS allows for early loan settlement at any time without prior notification. To settle the loan, students must pay the remaining loan balance plus any accrued interest.
