Going to college or university can be expensive, and many students need help paying for it. Two common ways to get money for school are bursaries and student loans. While both help pay for education, they work very differently. It’s important to understand these differences when deciding how to pay for school.
What is a Bursary?
A bursary is money given to students that they don’t have to pay back. It’s like a gift to help with school costs. Bursaries are usually given based on things like:
- How much money a student’s family has
- How well the student does in school
- What the student wants to study
Key Things About Bursaries:
- Free money: You don’t have to pay it back
- Good grades: Often given to students who do well in school
- Financial need: Many go to students who can’t afford school on their own
- Special rules: Some are for certain subjects or careers
Who Gives Out Bursaries?
- Government: Like the NSFAS in South Africa
- Schools: Many colleges and universities have their own bursaries
- Big companies: Places like Sasol and Eskom in South Africa
- Charity groups: Organizations that want to help students
What is a Student Loan?
A student loan is money you borrow to pay for school. Unlike a bursary, you have to pay back a student loan, usually with extra money called interest. Student loans are easier to get than bursaries, but you have to be careful about borrowing money.
Key Things About Student Loans:
- Pay it back: You must return the money, plus extra
- Borrow what you need: You can usually get enough to cover all school costs
- Credit check: The lender might look at your family’s money situation
- Repayment plans: Different ways to pay back the loan after school
Who Gives Student Loans?
- Banks: Big banks like ABSA and Standard Bank in South Africa
- Government: Some government programs offer loans
- Special lenders: Companies that focus on loans for students
Let’s look at the good and bad points of each:
Bursaries in South Africa:
| Good Points (Pros) | Bad Points (Cons) |
| Free money – no need to pay back | Hard to get – lots of competition |
| Can cover all school costs | Might have strict rules to follow |
| Might include extra help like mentoring | Often need really good grades |
| Can help with job opportunities | Might need to work for certain companies after school |
| No worries about debt after school | Might not cover all expenses |
| Given by trusted organizations | Might limit your choices of what to study |
| Helps you do well in school | Applying can be hard work |
| Some give money for living costs too | Can lose the money if you don’t follow the rules |
| Can help you meet important people | Might have to do extra activities |
Student Loans in South Africa:
| Good Points (Pros) | Bad Points (Cons) |
| Easier to get than bursaries | Have to pay back with extra money |
| Can cover all school costs | Owe money for a long time after school |
| Borrow only what you need | Might need good credit or someone to vouch for you |
| Can help build good credit if you pay on time | Extra money (interest) adds up over time |
| Lets you go to school right away | Might affect what job you choose to pay it back |
| Usually just need to pass your classes | Can cause stress about money |
| Can use for different school costs | Hard to get rid of the debt if you have money problems |
| Some have fixed interest to help with planning | Need to give lots of money information to get one |
Main Differences Between Bursaries and Student Loans
Paying It Back
The biggest difference is whether you have to return the money:
- Bursaries: Free money you keep
- Student loans: You must pay back, usually with extra
Who Can Get Them
It’s different for each:
- Bursaries: Often based on grades, money needs, or what you study
- Student loans: Usually easier to get if you’re going to a real school
How to Apply
Getting each type of money works differently:
- Bursaries: Might need essays, interviews, or proof of good grades
- Student loans: Usually simpler, focusing on your money situation
How Much You Get
The amount of help can be different:
- Bursaries: Often cover specific costs or give a set amount
- Student loans: You can usually borrow enough for all school costs
Future Money Effects
Your choice can affect your money for a long time:
- Bursaries: No money worries after school
- Student loans: Might have to pay back a lot after finishing school
Rules and Requirements
Each option might have different rules:
- Bursaries: Might need to keep good grades or work for a certain company later
- Student loans: Fewer rules about what you study, but you have to pay them back on time
Choosing Between a Bursary and a Student Loan
Think about these things when deciding:
- Money needs: If school is too expensive, try for bursaries first
- Grades: Good grades might help you get a bursary
- Future job: Some bursaries are for certain jobs
- Borrowing comfort: Think about how you feel about owing money
- What’s available: Bursaries can be harder to get than loans
Tips for Getting a Bursary
- Start early: Many have deadlines long before school starts
- Look everywhere: Search for bursaries in your subject or for your background
- Make a good application: Include all needed papers and write a strong letter about yourself
- Try for many: Apply to lots of bursaries to have a better chance
- Keep grades up: Many bursaries need you to do well in school to keep getting money
Being Smart with Student Loans
If you choose a student loan:
- Borrow only what you need: Don’t take extra money you don’t really need
- Understand the loan: Know about interest and when you have to pay it back
- Think about working part-time: This can help you borrow less
- Look at repayment options: Some loans have plans based on how much you earn later
- Plan ahead: Start thinking about how you’ll pay it back before you finish school
How Your Choice Affects Your Future
Picking a bursary or loan can change things after school:
- Job choices: Bursaries might require you to work certain jobs, while loans might make you choose higher-paying jobs to pay them back
- Money situation: Not owing money from a bursary can give you a good start after school
- More school: If you don’t owe money, it might be easier to go to graduate school later
Government Help for School
Many countries know school is important and offer help:
- South Africa: The NSFAS gives lots of help to students who qualify
- Other places: Many countries have similar programs to help students pay for school
Conclusion
Choosing between a bursary and a student loan is a big decision. You need to think about your own situation, what you want to study, and your long-term money plans. Bursaries are great because you don’t have to pay them back, but they can be harder to get and might have special rules. Student loans are easier to get, but you have to be careful about paying them back later.
The best choice depends on you. It’s a good idea to look for bursaries first before thinking about loans. Sometimes, using both might work best. No matter what you choose, work hard in school and prepare for a good job afterward.
By understanding how bursaries and student loans are different, you can make a smart choice about paying for school. This knowledge helps you handle the tricky world of paying for college and sets you up for success in school and with your money.
