Bank Chief Gulnara Musataeva discusses how parents can ensure their children receive a university education through special deposits and loans
The cost of a year of study at universities in Kazakhstan ranges on average from 300,000 to 3 million tenge. In the 2020-2021 academic year, only 34% of students were on scholarships, while 66% were in paid programs. Not every family has significant savings, and therefore some applicants may not receive higher or specialized secondary education. A correspondent from the Kapital.kz business information center spoke with Gulnara Musataeva, Chairman of the Management Board of JSC "Nurbank," about the opportunities available to prospective students and their parents to pay for university education.
— The cost of higher education in Kazakhstan can amount to several million tenge. Therefore, many parents usually have to save for their child's education. However, not all of them know that there are special deposits to speed up this process…
— Indeed, with the help of the AQYL educational deposit, you can save for education faster. By opening such a deposit, one can receive rewards from both the bank and the state. This deposit offers the highest return in the market. Its rate can reach up to 16%. Moreover, the bank reward and state bonus are capitalized, meaning they are added to the principal deposit.
One of its advantages is that the funds in the deposit cannot be seized or otherwise claimed. Deposits up to 10 million tenge are insured by the Kazakhstan Deposit Insurance Fund. To open it, you will need from 3 MRC (monthly calculation index), which in 2022 is 9,189 tenge. The depositor can top it up at any time.
However, regular contributions instill discipline and, in the future, when the child enters a Kazakhstani or foreign university, parents won't need to worry about where to find the money. At Nurbank, you can top up such a deposit through cash desks and the mobile app in just a couple of minutes.
— What is the return on such a deposit?
— Banks set their own rates for the AQYL deposit. Our base rate on such a deposit is one of the most favorable in the market: 9%. Alongside the bank reward, a state premium is added: 5% annually for everyone and 7% annually for orphans, children without parental care, people with disabilities, children from large or low-income families. The state premium is calculated on the deposit amount accumulated by the depositor, including the bank reward. The premium remains for the entire term of the deposit. Since 2013, when the State Educational Savings System was launched, the state premium has not been reviewed.
— Can such a deposit be opened for a child from birth?
— Correct, such a deposit can be opened for a child from birth. All you need to do is present the child’s birth certificate at the bank. Primarily, these deposits are opened by parents, grandparents, who are preemptively concerned about the future of their children and grandchildren. Often, they open such a deposit when the child starts first grade.
Also among our depositors are working young people with an average income, planning to get a second higher education or a master's or doctoral degree. The educational deposit may also be of interest to companies implementing corporate social programs for their employees, as a motivational element. Investments in education have always been considered the most lucrative.
Depositors are not limited in choosing a place of study. AQYL deposit savings can be used to pay for studies at universities or colleges in Kazakhstan for vocational and technical education, bachelor's and master's degrees in all forms of education. It is also possible to pay abroad for educational and language courses with the funds from such a deposit.
— Can parents cash out the AQYL deposit early?
— At Nurbank, there are no penalties for early termination of such a deposit. In cases of its non-targeted use or early agreement termination, the depositor shall return only the accrued state premium amount to the budget.
However, if the child is admitted on a scholarship, the depositor is entitled to withdraw all funds from the account together with the bank reward and state bonus. Parents can also transfer these savings to an educational deposit for another child or continue to save funds for future education.
— I assume that deposits for 5 years are more in demand. After all, the rate for this period is fixed…
— Correct, educational deposits are indeed in demand for this term. At our bank, the AQYL deposit can be opened for 3 years and 5 years. The rates on them are fixed, we do not expect them to change soon.
Considering the deposit terms and the constantly changing market situation, it is necessary to choose a reliable bank. Nurbank has been operating in the market for 30 years, during which time it has established itself as a stable and resilient financial institution. Our activities are based on reputation care, a balanced approach to risk assessment. That is why clients choose our bank.
— Let's move on to educational loans. This loan is guaranteed by a state structure — the Financial Center…
— This loan is offered only by our bank. Applicants or students can obtain such a loan to pay for studies at a university or college. We consider that the matter of gaining education is very important not just for students and their parents, but also for the country as a whole. After all, education today is one of the most crucial aspects of economic development. The prospects for our state's development largely depend on its quality. That is why a program was developed in Kazakhstan, under which it is possible to arrange an educational unsecured loan on favorable terms.
The guarantee of the Financial Center is the collateral for the loan. It guarantees the loan repayment if the borrower violates the terms of the loan.
We are working on improving the educational products. After all, every parent wants to provide their child with quality education. A limited number of students get scholarships for education in Kazakhstani universities. Many study in public and private universities at their own expense. It often happens that students are forced to choose a specialty to get a free spot rather than the one they dreamed of.
— What are the conditions for this loan?
— The loan amount is limited by the cost of education but should not exceed 5 million tenge. A loan can be arranged for up to 10 years, the interest rate for it is from 20% per annum. The annual effective interest rate is from 22.5%.
The advantage of this loan is the grace period for repaying the principal and a very attractive loan term. The bank may offer a deferment for repaying the principal during study at a university or college, and within 6 months after graduation, the borrower pays only interest on the loan.
Once the grace period ends, the principal repayment begins. It is assumed that within six months, the young specialist will find a job and will be able to make payments easily. The borrower can repay the loan early without penalties.
Often, one or two co-borrowers are required to arrange an educational loan. They must confirm their solvency. The bank also presents requirements to students applying for an educational loan. They should be over 16 years old. The number of points according to the UNT or comprehensive test should be at least 70, the average exam grade
— not less than 3.75 on a five-point scale, not less than 2 on the GPA, not less than 65% in a credit-based system.
— Is this loan available only for education in Kazakhstan?
— Correct, it is not possible to get such a loan for studying abroad. When it comes to paying for education in Kazakhstan, an educational loan can be obtained to pay for one or several semesters of study.
For example, a student has already studied several years at a prestigious university, where the tuition cost is several million per year. And their family, unfortunately, did not calculate their strength in advance and cannot continue payment. In this case, arranging an educational loan becomes an excellent solution. The program allows for opening a credit line for the duration of the education. Loan funds will be transferred to the educational institution's account in tranches each semester or once a year.
— Why is it more advantageous to choose an educational loan over a standard unsecured one?
— First, the maximum term for a regular unsecured loan is no more than 5 years, while an educational loan can go up to 10 years. Second, rates for a standard loan are significantly higher.
Lastly, the main advantage is the loan repayment deferral granted by the bank throughout the entire study period, where only interest on the loan is paid. Thus, educational loans guaranteed by the state allow students to study peacefully, secure employment, and only then repay the loan.
— What changes are being considered in this direction?
— Currently, there is a discussion on offering long-term preferential loans for paying tuition fees at universities at 2-3% per annum. Our bank will also continue working on improving its products and services.
Source: https://kapital.kz