Money matters
How to plan your finances for a mid-career return to academia
The thought of returning to an academic space after years of being part of the workforce is one that can conjure a significant amount of anxiety. The first and perhaps most daunting challenge is the cost, not only of the course but also of sustaining oneself as a full-time student again.
Tertiary education does not come cheap. A 2021 study by investment and banking group Old Mutual found that a year of university studies comes with an average price tag of around R65 000, and that is expected to rise to R107 600 by 2025 and skyrocket to a lofty R165 600 by 2030. This still pales in comparison to the cost of a postgraduate qualification from a business school. As of 2022, an MBA degree from a reputable institution costs anything from R150 000 to R5 000 000! Some institutions also prescribe compulsory international field trips that can add a couple of thousand rands more to the final bill.
Compared to their international counterparts, however, South Africa’s MBAS are well-priced. A first-year student at either Stanford Business School or Harvard can expect to pay at least R2-million to attend classes and live on campus — and that’s just for their first year of studies.
Fortunately, a number of options exist for those who are considering the switch between a full-time job and a return to studying. Loans, bursaries, and other funding options are just some of the ways that prospective students can help sustain themselves while furthering their education. Capitec Bank states that combining financial aid with personal budgeting plans can also help lessen the financial burden of returning to academia by a significant amount.
Financial aid
Students have choices when it comes to deciding how to fund their academic endeavors. According to education finance provider Fundiconnect, the most popular funding methods are study loans, scholarships, grants and bursaries.
In its official information pack for student funding, the Department of Higher Education and Training explains that scholarships are merit-based awards for above-average academic achievements, and usually only cover a portion of the tuition fees on the condition that certain criteria are met and that achievement is maintained.
Bursaries, on the other hand, are academic sponsorships that cover the full cost of studying, including tuition, study materials, accommodation and sometimes even a stipend for living expenses. The recipient of the bursary is not required to pay the money back directly, but may be required to work for the company that footed their study bill for a determined period of time. Bursaries can be granted on the basis of financial need, or on the basis of academic or other achievements.
While there is a wide variety of scholarships and bursaries that exist for graduate studies, funding opportunities for older students and postgraduate qualifications are more commonly offered by special interest groups such as associations, foundations, religious groups or niche industry players, and are often much more focused and specific in their requirements and criteria.
Many companies also offer bursaries to employees who want to return to school. This according to Ian Hurst, who is the Managing Director of Paymaster People Solutions. In South Africa, a company may contribute up to R20 000 per year to its employees’ children’s education too. A maximum of R20 000 per individual may be offset as a tax free benefit to the employee, he writes.
According to Hurst, most companies require that the prospective student pass all of their classes or modules, or risk forfeiting the bursary payment and having to repay the money. Employees who earn less than R600 000 per year are eligible for company bursaries that can provide up to R60 000 towards a university qualification.
Finally, there is the option of securing a bank loan or student loan through a registered financial institution. Students will be expected to repay the money borrowed. Student loans specifically cater to tertiary education needs: tuition, study materials and living expenses. Under the website’s Frequently Asked Questions section, Nedbank clarifies that student loans are not just for school leavers: “There are no age limits. You can apply for a student loan for as long as you qualify to attend a full-time or part-time programme at an accredited institution.”
According to Capitec Bank, a bank loan might be ideal for prospective students who want to complete short courses that do not meet the criteria for a study loan. Prospective students can make use of the online loan calculator from Fundiconnect to help them calculate the costs and connect with relevant funding opportunities.
Personal Budgeting
While there are plenty of options for returning adult students to finance their new academic ventures, it is also important for them to adjust their budgets to account for the new expenses and loss of income when returning to full-time study. For the prospective student determined to resume studying, it pays to plan ahead financially. This should include a detailed financial review that captures everything from monthly debit orders to small day-to-day costs.
A lifestyle audit might also come in handy to see where the fat can be trimmed. The required changes might be bigger than just cutting on restaurant meals; for some, it may mean moving to a smaller home, or even relocating to a town where the cost of living and of education is lower than in the metro hubs.
Another way to mitigate the impact of emergency expenses like medical bills is to prioritise healthcare and healthy living long before the first day back in the class. Prioritise annual check-ups and routine procedures before giving up a job that offers benefits like medical scheme membership or health insurance. Go to the dentist, schedule an eye test and visit the dermatologist while still enjoying health cover. Studies have found that maintaining consistent medical insurance coverage can be one of the toughest challenges for returning students.
Education is an investment that can seem daunting and scary at times, especially for individuals who have established careers and settled into a comfortable work rhythm and structure. However, this does not need to stand in the way of embarking on the next leg of the journey to lifelong learning. By looking into financial support and working smarter with available resources, it is possible to pursue a postgraduate qualification and expand horizons — and to do all this without breaking the bank.