How to manage university costs

Getting a university education is a goal many South Africans aspire to. However, the expense can leave students – and their parents – out of pocket or in debt.

We outline ways to contain the costs and cover tuition and additional expenses.

Tip: Learn how savings and investments can help you achieve your education goals.

Start saving early

Education inflation outpaces headline inflation by 2.5% to 3%, so saving the full cost of university fees, for you or your child, is challenging.

The average cost of a university education in South Africa could be around R107,600 per year by 2025, and R254,700 by 2035, says Marius Pretorius, head of marketing: retail savings and income at Old Mutual. 

If you’re a parent, the earlier you start saving for your children’s education, the better, he stresses.

Ideally, you should invest strategically to keep up with inflation, and try to increase your contributions over time.

Bonds and fixed-income securities can provide you with certainty over specific periods, while investing in unit trusts can help to grow your funds – but may come with some risk, as markets can be volatile, he notes.

A tax-free savings account is an excellent savings option as you can withdraw your money at any time, and you pay no tax on interest, dividends, or capital gains, Pretorius suggests.

However, given the annual limit of R36,000, you'll need to save over several years to reach your goal. Further, the lifetime contribution limit is R500,000, and any money withdrawn still counts towards this limit.

Manage tuition costs

Students from families with a household income of less than R350,000 a year are eligible for funding from the National Student Financial Aid Scheme (NSFAS).

If the household income is higher than R350,000 but less than R600,000 a year, students will, in terms of Cabinet approval in late 2023, qualify for a “missing middle” bursary – financial aid for those who don’t qualify for NSFAS funding but can’t afford higher education.

Most universities also offer grants for merit, sports, and arts and culture, among other achievements and disciplines, says Herman Esterhuizen, spokesperson for the University of Johannesburg (UJ).

“UJ offers early-settlement discounts for students paying their own fees,” he notes further.

Consider transport expenses

Where a student has a bursary or aid that pays accommodation costs directly to the university, it’s advisable to stay in an accredited on- or off-campus residence, says Esterhuizen.

“Research different on-campus housing options and choose the most affordable one that suits your needs,” he recommends.

“If you can’t live within walking distance of the campus, consider your transport costs when selecting accommodation.”

Esterhuizen notes that students who live in university-accredited off-campus accommodation within a certain radius of the campus can benefit from a shuttle service to and from campus.

UJ has a free intercampus bus service for students, he adds.

Buhle Zuma, senior communications offer at the University of the Witwatersrand, says Wits has buses that collect and drop students off at various points between its Braamfontein and Parktown campuses.

Make budget-savvy food and book choices

Ask your university about food provision, Esterhuizen advises. UJ, for example, has a social feeding scheme that distributes monthly food parcels to qualifying “missing middle” students, he says.

Prepare meals at home to save money, he recommends – takeaways can quickly consume a budget. 

“Plan your meals and shop with a grocery list to avoid food waste and impulse purchases,” Esterhuizen suggests. 

Buy used textbooks from bookstores or online platforms, or rent them, he adds.

“Embrace digital textbooks, which are more affordable and portable. Universities usually provide e-books for the modules for which students are registered.”

Earn extra cash where you can

Part-time work can help students cover costs.

“Wits has a central portal where internal part-time and casual vacancies are advertised to registered students,” says Zuma. “Students can also participate in internship opportunities, such as those enabled by the Presidential Youth Employment Stimulus.”

Work-study programmes allow students to work part-time on campus while receiving financial aid, while on-campus employment opportunities exist in dining halls, libraries, or administrative offices.

“The Wits Entrepreneurship Clinic helps promote entrepreneurship among students, providing them with valuable support if they wish to start small businesses,” Zuma concludes. 

Tip: Is debt preventing you from saving for your child’s education? Find out more about debt consolidation.