Monday, November 2, 2009

The Importance of Education

Investing money in education is never ever going to be a waste. Essentially, you are investing in yourself and turning yourself into a sellable commodity. While having a sterling education will not by any means guarantee you a job but will definitely put you way a head of the pack in terms of "hire-ability".

Choosing what to study can be a daunting task and very overwhelming as there are so many options out there. Here are a few things to keep in mind when considering what to study:

  • what are specific set of skills and talents
  • the long term monetary success of your chosen career, are you skills more suited markets in other countries
  • the future prospects of your skills, will they last the test of time, continual learning and education is important
  • Most NB of all – will you enjoy your job, do not choose a career based on prestige and money
Whilst many students are lucky enough to have parents who pay for their tertiary education, there are also many who don't and need to find avenues of self finance.

There are 3 main options open to you:

  1. Yourself – start working from when you are in school, take a part-time job and save up. Continue working through college. There are many students who support themselves this way.
  2. Bursaries and scholarships – the best way to find information about these are to check with the institutions you are applying to and apply for as many as you qualify for. Competition can be very tough. The facts that go in to selection are things like: needs, family assets, family income, the course you are applying for, and your marks and ability as a student. Another option is to approach large companies write letters to them/emails and include a copy of your CV, references and photocopies of your qualifications.
  3. Loans – when all else fails there is always the option of taking a loan. This is what is called a good investment; you are investing in your ability, potential and skills. But, remember debt is still debt and has to be paid off. Always try to borrow the minimum by taking a part time job and supplementing your loan.
Options for loaning money:

  1. Your parents employers: many employers will give interest-free or very low interest loans to employees to help educate their children
  2. A future employer: if you are fortunate enough to find someone who will employ you after you have qualified they will often assist you with a loan. Sometimes they even allow you to wok the loan off by working for them for a certain amount of time after graduating in place of paying the loan back
  3. Your parents' home loan: home loans have a very low preferential interest rate of up to 3% below the prime rate at which the bank normally loans money
  4. Banks: student loans are offered by almost every bank with low interest and they often have a package deal bank account with lots of perks
How to qualify for a bank loan:

  1. The amount you can borrow – this depends from bank to bank and on what you are going to study
  2. Interest rates – this also varies according to the course you are going to do, one that leads you to becoming a highly paid graduate with get you lower interest rates, unfair I know. However, all rates for all loans are below prime and postgraduate students often get interest rates that are half the prime rate.
  3. Loan repayment periods – if you are a full-time student you have to pay the interest on your loan monthly and pay the actual amount in the same amount of time as it took you to study your course once you graduate. If you are a part time student you are required to pay both the interest and start repaying your loan while you study.
  4. Security – you have to have someone, like a parent, to sign surety on the loan if something happens and you can't. You also have to take out life insurance to cover accident death or disability so that the bank still gets its money back.
  5. If you fail or drop out – if you fail you will not get a loan for the next year and if you drop out you have to pay back the amount just as if you had finished.
  6. Other benefits – banks usually have special student account packages which lets you take advantage of loads of different benefits offered by the bank. However, be very careful if they issue you with a credit card, it's not free money, its more debt.
  7. Renewal – you have to renew you loan each month by sending your exam results to prove you passed as well as proof that you have registered as a student for the following year.
How are you guys financing your studies? Are studies as expensive overseas as they are here in South Africa? Where any of you lucky enough to get bursaries and scholarships? Leave a comment!


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