What your parents taught you about
money and how they handled their finances has a direct bearing on how you, as a
student, manage your study bursary or loan. It all boils down to your financial
education and learning by example.
Most people are rather uninformed
about personal finance, and this shows not only in their own finances, but also
in how their children manage money. This does not mean that all students are
inexperienced in handling their finances, but a considerable number of them do
need guidance to make their bursaries or loans last through the year.
Eduloan views itself as a
responsible company that would like to help as many students as possible in furthering
their careers. As one of South Africa’s foremost providers of study finance, we
want to do much more than simply give students access to funds. We want to
encourage a culture of financial discipline, to make sure students use the
funds available to them responsibly. Eduloan aims to be a catalyst, an enabler
that takes students from their present situation to becoming responsible and
contributing South Africans.
We found that students were spending too much
money on entertainment and personal luxuries that had nothing to do with their
studies. Long before the end of the academic year, these students were
presented with a shock: their funds were depleted!
This is where Eduloan’s Eduxtras
product plays an important role. In essence it is a budgeting system whereby
the bursar can determine and allocate funds for a specific item, called
spending pockets - like meals, accommodation, books, and even cash.
Secondly, Eduxtras helps control
spending on essentials. We implemented processes that prevent students from
spending their bursaries or loans on, for instance, cigarettes or alcohol.
Used to a limited amount of pocket
money, or in some cases no money for personal use at all, students are granted
a loan of, say, R25 000 in their first year of study. Too many students, and in
particular those from a poor background, this is an incredible amount of money
that will, in their minds, last forever.
The most important aspect about
Eduxtras is that students are taught how to budget and are left with a clear
picture of where they stand financially in any given academic year, knowing
exactly what they can spend on and what not. It is a tool that teaches the
students at an early age how to work with money and make it last for the period
it was intended for. We force students
to stick to their budget, at the same time inculcating in them a sense of
responsible money management.
We have developed a financial
education booklet that we hand out to students to help them understand money
matters. When activation of their Eduxstras card takes place, Eduloan
representatives are there to explain the finer details about security and using
the card. It works very much like a bank
debit card. The student can use the card to pay but the system can also facilitate
payment by using cell phone technology with the same pocket technology.
The student and the bursar can draw
a real-time report on the spending done. Whenever a transaction happens, they
can see that their account is debited and how much money is left for future
purchases. In cases where the full amount in a specific spending pocket, for
example books, is not used up, the bursar is refunded that amount by the end of
the year.
Eduxstras is a scalable, workable
solution that helps the student reach his or her academic goals and assures the
bursar that the money granted is spent well. The system gives bursars access to
a full report of what the student is spending money on, which allows the
bursars to adjust the spending pockets for, accommodation or meals, should they
feel that these are not sufficient.
Over time, students learn to
understand their spending patterns. Later on, when they have graduated and are
not part of the Eduxtras system any longer, we hope that responsible budgeting
and prioritising expenses will have become second nature.
Eduloan’s aim is to see more
financially balanced students, who understand that a financial buffer needs to
be built to protect them against unexpected expenses, understand the difference
between good and bad debt, and who can manage the funds available to their
advantage.
ENDS
