How to teach kids about student loans: map the real cost of studying in SA, start saving early, and run the payback math with your mini millionaire
Getting any sort of qualification after school in South Africa isn't a cheap exercise. The average first-year degree at a public university now costs around R62,000, and that's before you’ve even started thinking about accommodation, textbooks, and transport.
Yet most mini millionaires arrive at university having never had a proper conversation about how it all gets paid for.
The thing is, student loans aren't bad, but one has to remember, they're not free money either.
This edition is all about pulling that conversation forward, so the funding plan happens around the kitchen table when you still have time and not when it’s too late.
Not all debt is equal
We often hear that student debt is "good debt."
And it can be. A degree can boost earning power by as much as 67%. But "good debt" doesn't mean "harmless debt." It's still a legal commitment with real consequences if you fall behind.
For example, Thandi borrows R80,000 a year for a three-year BCom (that’s R240,000 in total). Jeff skips uni and starts as a junior marketing assistant at R10,000 a month.
Three years later, Thandi lands a coordinator role at R15,000, but she's repaying R4,500 a month for the next seven years.
Jeff, with three years' experience and no debt, earns R13,000. So while Thandi now earns R2,000 more, it will take a long time for her to pay off R240,000+interest.
So Thandi didn't necessarily make the wrong call, but the math matters before you sign.
Takeaway: Even "good" debt deserves the same scrutiny as any other financial decision.
Map out the money before picking the course
The average cost of tuition is R62,000 a year, but when you also add in necessary things like accommodation, food, transport, and textbooks that number can more than double.
The thing is, you don't need to know which university or course your child will choose to start saving for it.
The habit here is simple: treat future education costs like a monthly bill, and start putting away money early. Even R500 a month from age 8 adds up to over R60,000 by matric (and that's before any interest, btw).
Open a savings account in your child's name and let them watch it grow. Even better is to involve them in setting the goal. When they see the balance climbing toward something real, they start to understand that big things get funded one small deposit at a time.
Takeaway: Start saving before they start studying.
Work out the payback together
Sit down with your mini millionaire and work out what a student loan actually costs over time.
Remember Thandi's R240,000 loan? Now run those same numbers for your mini millionaire's dream qualification.
For example, if they borrow R80,000 a year for a three-year degree, that's R240,000. Even at an interest rate of around 11–12% over seven years, they could repay well over R400,000.
Now compare that to a scenario where half the cost was covered by savings or bursaries. When your child sees that every R10,000 saved today avoids R20,000 in future repayments, the motivation to hunt for funding becomes very real.
Takeaway: Nothing motivates a bursary search like seeing interest add up.
This week's free resource is the My University Money Map, a simple one-page worksheet that helps your family calculate the real cost of studying after school.
It’s not just tuition, but also their accommodation, food, transport, textbooks, spending money, the whole shebang.
It comes with a filled-in example using current SA averages so you can see how quickly R62,000 in course fees becomes R185,000 a year.
Then there's a blank version for your mini millionaire to fill in with their own dream course. Nothing makes the Habit section hit harder than putting actual rands in actual boxes.
