Thinking out of the box for your child’s education

Finding a job in South Africa is hard, and every update on our employment statistics tells us that it’s getting harder. According to the latest official estimates, formal unemployment is at around 33% – one of the highest levels in the world. Youth unemployment has for some time outstripped this figure, and now stands at an astonishing 62% of young people aged between 15 and 24.

This downward spiral has been a national crisis for years. Like many South African parents, you may be investing as much as you can so that you can afford to give your children a university education. You may believe a university degree will give them a better chance of gaining formal employment.  But not all young people are suited to a university education, and not all of them are interested in one – especially if they’re planning a career that doesn’t require a degree.

However, even if your child isn’t going to university, they may still need a qualification to succeed in the highly competitive job market. As a caring, responsible parent, which alternative types of tertiary education should you be encouraging your children to explore in these circumstances?

What are alternatives to university in further education?

While university graduates are generally more employable and command better salaries in formal employment, a degree is not the only avenue to post-school qualifications and career success. There are several other options that your kids could consider, including the following:

Apprenticeships and learnerships

Along with high levels of youth unemployment, South Africa also has a well-documented shortage of skilled artisans and tradespeople across all trades. An apprenticeship is generally trade-based, while a learnership is usually profession-based, but both involve on-the-job training with a salary while you learn. These workplace training programmes fall under the relevant Sector Education and Training Authorities (SETAs), and their qualifications are geared to specific needs in the labour market. Usually, the training programmes are at least partly funded by employers who need the relevant skills.


Internships involve working for a particular company over an agreed period for a small wage or for free. Interning is a means to gain not only work experience, but also networks in formal employment. The experience and contacts gained through an internship can be invaluable. Many companies shy away from employing people with no experience, and good references from an intern position can show prospective employees that an applicant has the right skills and competence. Interning means you will have to finance your child’s living and accommodation expenses only, rather than paying for their studies.

College education

There are hundreds of registered public and private colleges in South Africa. They offer diplomas or certificates focused on employable skills. These colleges, unlike more abstract or highly professional fields of study at universities, may be dedicated to specific disciplines such as nursing, fitness, accounting, business and so on. Others offer more general fields of study. Before you pay to sign your child up for one of these courses, however, make sure you are dealing with a reputable, established educational college brand. There are many fly-by-night operators in the sector, so make sure the institution offers courses sanctioned by the South African Qualifications Authority (SAQA). The college should also provide a SAQA ID confirming that it is registered with SAQA.


Nedbank offers a range of savings and investment products to suit all your financial goals over the short, medium or long term


Technical and vocational training

Colleges offering technical and vocation-specific training have long been part of the South African educational landscape, but many people dismiss them in favour of university degrees. Parents who can look beyond that unfounded prejudice, however, might find this option more affordable than a university.

These colleges offer valuable technical and vocational qualifications to young people who may not want to go to university – or those who don’t want to stay at school to complete matric.

As with public and private colleges, it’s essential to check their accreditation when you choose one of these institutions. Consult the Department of Higher Education and Training’s Technical and Vocational Education and Training Colleges page to explore reputable options. 

How to invest for your child’s tertiary education

Deciding how they want to earn a living is a question your child may only start considering when they’re well into high school.

However, if you plan to support them in whatever field they choose, you need to plan an investment strategy for their education as early as possible. Decide on an investment timeline and find a vehicle that suits your future needs – preferably when your child is born.

Disciplined, consistent saving and investment over the long term will bring you adequate returns to finance your children’s educational needs. Whether they eventually choose to study at a university, or to follow one of the alternative paths we’ve mentioned, you’ll be ready to support them with all they need.

Bear in mind that with current rates of inflation, it is estimated that a basic university degree will cost about R180,000 per year by 2030. Here’s a partial list of some savings and investment vehicles with the flexibility to fund your child’s career choice:

Tax-free investment

South African tax law allows you to contribute up to R36,000 per year to tax-free investments, up to a lifetime limit of R500,000. A tax-free investment (such as a high-equity fund or an equity unit trust) is one of these options. No tax will be levied on the investment returns, provided that your contributions stay within the annual and lifetime limits.

If you start contributing to a tax-free investment when your child is born, in 18 years the compound interest will have built a considerable sum.

Unit trusts

A unit trust pools money from numerous investors into a single fund that then invests in a range of assets (generally stocks, bonds and shares). All the investors are exposed to opportunity and risk in the investments, which are managed by professional fund managers. If you’re investing in unit trusts to finance your child’s future, you’ll want the peace of mind of knowing that a reputable expert is handling your investment. You might want to rely on your bank to manage your unit trust investments.

Life insurance

When you’re imagining your child’s future, you expect to be there with them as they finish their education, get a job and start building their own families. It’s never pleasant to dwell on events that might disrupt that vision, but tomorrow is never guaranteed. If you want to make sure your children can fulfil all their educational dreams, you need an investment to take care of them if you’re no longer around to do so. It makes sense to have a life insurance policy with your child as the beneficiary to back up your investments for education. You can appoint an executor or guardian to manage the investment until your child is of age.

Nedbank offers a range of savings and investment products to suit all your financial goals over the short, medium or long term. Get expert advice on how to invest and give your children the educational opportunities they deserve.