Students, and their parents, are increasingly turning to student loans to fund their tertiary studies, according to First National Bank (FNB).
The bank reported that student loan applications are up 6% in 2013.
With a 24% unemployment rate for South Africa and double that for young people, FNB cited a recent survey showing that young graduates have an unemployment rate of only 6%.
FNB reported that 42% of student loan applications are from Gauteng, followed by the Western Cape in second place at 15%.
The majority of students are studying towards a diploma (24%), followed by 14% studying for a BA degree and 9% studying towards a computer science qualification, FNB said.
“Student Loans are a sound investment in a student’s future and a convenient way to pay for tuition fees, computers, books and sometimes even accommodation. On average, loans are taken over 12 months for around R50,000,” said CEO of FNB Personal Loans, Pieter du Toit.
The bank noted that demand for student loans has increased as families are placing a much greater emphasis on tertiary qualifications in a competitive labour market.
“A higher education is critical to 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. Although loans can be used for any student requirements, caution is required to keep the total debt manageable and affordable” said du Toit.