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Why Is It Important to Pay Back NSFAS Loans?



Why Is It Important to Pay Back NSFAS Loans?

Why Is It Important to Pay Back NSFAS Loans? The National Student Financial Aid Scheme (NSFAS) has played a pivotal role in supporting countless students in pursuing tertiary education. While many have benefited from NSFAS funding, there is ongoing confusion regarding loan repayment, especially given recent policy changes. This article aims to provide clarity on the importance of repaying NSFAS loans.

NSFAS Repayment Obligations

Students who entered into an agreement with NSFAS before 2018 are obligated to repay the loan as per the legal agreement. However, those who utilized NSFAS after 2018, whether starting or continuing their studies, are covered by the free education policies.

Consequences of Non-Payment

Failure to repay NSFAS loans can have severe consequences on various aspects of an individual financial and professional life. The following are critical areas affected:

1. Credit Score

  • Your credit score is vital for obtaining loans, credit cards, and even influencing insurance premiums.
  • Non-payment or late payments to NSFAS can negatively impact your credit report, affecting your ability to secure financial assistance.

2. Job Placement

  • Certain sectors, like financial services, conduct background and credit checks during the hiring process.
  • NSFAS non-payment can be viewed unfavorably by employers, potentially hindering job prospects.

3. Interest Rates for Other Loans

  • An undesirable credit history due to NSFAS non-payment may result in higher interest rates for other loans, such as car or store card payments.
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4. Home Buying Prospects

  • Strict credit history requirements for home loans make NSFAS non-payment a potential obstacle to homeownership.
  • Non-payment could lead to being blacklisted, impacting your ability to secure various financial opportunities.

NSFAS Repayment Process

Repayment of NSFAS loans begins once the borrower is employed and earns above the repayment threshold. The repayment amount depends on the modules passed, with 40% of the loan converted into a bursary for each successful semester or year. Repayment methods include debit orders, electronic fund transfers (EFTs), or salary deductions.

Who Must Repay NSFAS?

Students who completed their studies before 2018 fall under the obligation to repay NSFAS loans.

Determining NSFAS Repayments

Repayment amounts are contingent on the borrower’s income and are calculated as a percentage of their annual salary. The repayment period extends for the duration of employment, potentially spanning over 30 years based on earnings and borrowed amounts.


Repaying NSFAS loans is crucial for maintaining financial stability and securing future opportunities. Understanding the repayment process and meeting obligations ensures a positive credit history and opens doors to various financial prospects. For more information on NSFAS repayment, individuals can contact NSFAS at 080 006 7327.

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