As more and more students rely on financial assistance to fund their
studies, the administration burden on universities, FETs (Further
Education and Training) institutions and corporate sponsors has
increased.
The result is that they often struggle to efficiently administer the
bursaries awarded to their students. Lacking extra capacity, they find
the most efficient way of reducing their burden is to dole out the full
year’s value of a bursary, less tuition fees, to students up front.
It is estimated that the average cost of a three year degree is
around R75 000 in South Africa – for tuition alone. The cost of rent,
food and books can mean that the true cost is around R150 000 – a lot of
money for most people. In order to benefit the maximum number of
students, with the limited funds available, we need to consider how this
money can best be managed – to everyone’s benefit.
Students with limited financial education, who have never had to
compile a budget, are asked to manage sums which, to them, might seem
almost limitless. The truth is that R50 000, if not managed wisely, can
be spent in just a few months.
Without advice and management tools in place, many students run out of
funds towards the middle of the year, placing enormous pressure on
families to keep students in tertiary education. Concentrating on your
studies is hard enough without wondering whether you have enough money
to buy groceries for the month.
Eduloan’s Eduxtras card is an easy-to-use, secure solution in the
form of a debit card which will assist both students and their sponsors
to ensure that funds are spent for the purpose they were intended. As
with any bank card, the Eduxtras solution offers online statements and
easy swiping at merchants on and around campus. Bursars can stipulate
online in a once-off transaction for each student how these funds can be
disbursed, with sums allocated for rent, food and groceries, books, and
tuition. There is also a cash facility, with funds transferred to the
student’s bank account.
Universities have welcomed the Eduxtras card, saying it allows them
to better serve their students while reducing their administration costs
associated to managing funds allocated by bursars and The National
Student Fund Aid Scheme (NSFAS).
Roekus de Villiers, financial aid director at Tshwane University of
Technology (TUT), said his institution has benefited by introducing the
Eduxtras card to students. Previously, TUT had employed eight people to
manage a book voucher system which allowed students to buy their books
from on-campus stores. Invoices were manually processed every month.
“There’s no doubt the solution we currently have works for us,” he
said. Not only has the university increased the accuracy of its
record-keeping, but it has also increased trust.
“One of the biggest benefits we’ve gained is that there is trust from
the students’ side,” he said, explaining that students felt more
comfortable with the process, while bursars were also satisfied that
funds were being appropriately used.
Funds in each pocket can be used only with suppliers that are set up
for each category. For example, the books allowance can only be spent at
contracted bookshops, and not on food. This ensures that overspending
in one category does not affect students’ other commitments. To assist
in budgeting and money management, real-time statements are available
throughout the month.
Once the allocation has been done, cards can be used at over 200
merchants around the country, with more added all the time. Over 80
accommodation merchants have signed up, as has Pick n Pay’s network of
supermarkets in the vicinity of the campuses.
The Eduxtras card offers more than convenience. For bursars,
universities and FET colleges tasked with bursary administration, it
also represents a significant cost saving. In order to provide the same
level of service available through the card, they would need extra staff
to administer monthly payments and would themselves have to vet
merchants. In the case of off-campus accommodation, one larger
university would facilitate transactions in excess of R80-million, with
multiple merchants, the administration involved is not insignificant.
Corporates, too, benefit from the product as they know the bursary
funds will be spent wisely and their students will be able to complete
their studies without financial worries.
With the cost of studying steadily increasing, deciding how much
money to allow for living expenses can become a guessing game. Eduloan
administers R550 million worth of bursary funds throughout the country,
and can advise what typical costs are for each category and how much
money should be allocated for each purpose.
For instance, tuition for undergraduate degrees costs up to R25 000
for government-funded institutions, but can be higher at private
facilities. Rental depends on the area, but usually costs between R1 200
and R1 700 a month. Books are a substantial cost, at an average R8 000 a
year. Students typically spend between R800 and R1 000 a month on
groceries.
Money paid over by bursars or other sponsors is kept in a trust
account and is not accessed directly by Eduloan, ensuring that the funds
remain secure.
Efficient bursary fund management leads to better outcomes. At a time
when we want students to concentrate on the new skills they are
acquiring, it does not seem wise to burden them with financial worries.
Some families end up going into further debt, through additional loans,
when the initial loan or bursary amount is exhausted. Other students
simply drop out.
There are no transactional costs associated with the card, and neither
are bursars nor education institutions charged any fees, as the business
model is based on agreements between Eduloan and merchants. But for
many students and bursars, the convenience and peace of mind it provides
are priceless.
“It’s important that the donor is happy that the funds are spent in
the right way, and those kinds of controls were built into the card,” he
says. “The solution definitely assisted us with the administration and
reduced the cost of staffing.” De Villliers said.
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