Studying While You Work: Employer Bursaries, Repayment Clauses and Checking Your College Is Real

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A few months into your first job, you may start thinking about the next qualification: a postgraduate diploma, a professional certificate, or a degree you didn't get to finish.

This time you have two advantages: an income, and possibly an employer willing to pay. You also face two risks that school leavers usually don't: a bursary agreement with conditions you haven't read properly, and paying a college that isn't registered.

Your options

• Part-time study at a public or registered private institution, usually in the evenings or at weekends.
• Distance learning, which lets you study around your working hours.
• Short courses and skills programmes, which are useful for specific skills but may not lead to a registered qualification.
• In-house training your employer runs or pays for.

Before choosing, decide what you need: a registered qualification, which is usually needed for promotion or professional registration, or a specific skill, which a short course might cover.

Employer bursaries: why the repayment clause matters

Many employers help staff pay for study. Under section 10(1)(q) of the Income Tax Act, a genuine ("bona fide") bursary from your employer can be tax-free for you. That's a significant benefit, because the same value paid to you as salary would be taxed.

There's a condition. SARS explains that an employer bursary is only exempt from tax if you agree to repay your employer if you don't complete your studies for reasons other than death, ill health or injury. If the agreement has no repayment clause, the bursary doesn't qualify for the exemption and is taxed as a benefit.

In other words, the clause that protects your tax position also means you'll owe your employer money if you drop out.

Reading a bursary agreement: what to look for

Before you sign, find the answers to these questions:

1. What does it cover? Tuition only, or also registration, exam fees and prescribed books?
2. What counts as "completing"? Passing every module, finishing within a set time, or both?
3. What happens if you fail a module? Do you repay that portion, or does the whole bursary become repayable?
4. Is there a work-back period? Some bursaries require you to stay with the employer for a set time after qualifying. How long is it?
5. What if you resign during your studies or the work-back period? How much would you owe, and is it reduced for time already worked?
6. What if you're retrenched? Does the repayment obligation still apply?

If any of this is unclear, ask HR to explain it in writing before you sign.

Short courses vs registered qualifications

Short courses can be valuable, but understand what you're buying:

• A registered qualification sits on the NQF at a specific level and can be verified by SAQA for employers.
• SAQA's verification service covers qualifications and part-qualifications registered on the NQF. It doesn't cover short courses or professional designations.

That doesn't make short courses worthless. It means an employer can't check them the same way, so keep your certificates and course outlines.

Check the college is real before you pay

This matters more than it might seem. The Department of Higher Education and Training (DHET) has been running bogus college campaigns with SAPS and other departments. A recent campaign in Johannesburg's Randburg CBD led to a college being shut down for failing to register with DHET and for offering unaccredited programmes. In March, the campaign moved to the Pretoria CBD.

DHET's Khetha career service explains that bogus or "fly-by-night" institutions are not registered with DHET as required by law, and may not be accredited by the quality councils for the courses they offer.

Registration and accreditation are two separate checks. A legitimate private institution needs both:

1. Registration with DHET. Check the Register of Private Higher Education Institutions or the Register of Private Colleges on dhet.gov.za, or call the DHET call centre on 0800 872 222.
2. Accreditation for your specific qualification by the relevant quality council: the CHE for higher education, the QCTO for occupational qualifications, or Umalusi for school and further education.
3. The qualification is registered on the NQF. You can search SAQA's register of qualifications on saqa.org.za.

Khetha adds one warning: don't rely on a certificate the college shows you. Check the registration yourself on DHET's website or by calling DHET.

If you find out your college isn't registered

According to Khetha:

• call DHET on 0800 872 222 to find out what to do next
• if the qualification isn't legitimate, deregister immediately and ask for a refund
• report the institution to DHET, the relevant quality council, the SETA and SAPS

Before you enrol: a quick check

1. Registered qualification or short course? Which do you actually need?
2. Institution registered with DHET? (Check it yourself.)
3. Qualification accredited and registered on the NQF?
4. If your employer is paying: have you read and understood the repayment and work-back clauses?
5. Can you realistically fit the study time around your job?

Studying while you work is hard, but it's one of the best investments you can make early in your career, as long as you've checked the college and read the agreement first.

This article explains general tax and education rules and isn't tax or legal advice. For your specific bursary agreement, speak to your HR department or a tax practitioner.