A student loan is a type of loan offered to current and prospective students enrolled in a qualification at an academic institution. These academic institutions include universities as well as public and private colleges.
Students apply for student loans which will allow them to pay their tuition fees and cover other costs related to their studies including textbooks, transport and accommodation.
Most student loans require students to start paying back the loans once they have completed their qualification and have secured employment. While the student is studying a nominated surety is required to pay interest on the loan.
Can A Student Loan Be Written Off?
Banking ombud Reana Steyn explains that debt can be written off if it is deemed to be prescribed debt. Prescribed debt are generally contractual and civil debts that were not acknowledged over a period of three years. However some circumstances could disrupt the prescription process.
When Is Prescription Interrupted?
- When the debtor verbally or in writing admits to owing the debt
- When the debtor makes a payment towards the debt; or
- If the creditor (body that provided you with a loan) issues and serves a summons on the debtor.
However, there are exceptions where the prescription period for certain debt can be longer than three years. A bank’s claim for the repayment of a debt based on a court order or claims for debts secured by a mortgage bond may only be prescribed after 30 years.
