Tau backtracks on plan to allow education institutions to report student debt to credit bureaus

The withdrawal of regulations comes after students, politicians and #FeesMustFall activists rallied against Trade, Industry and Competition Minister Parks Tau, who issued a gazette on 13 August 2025, aiming to amend new regulations under the National Credit Act, raising fears of students and those with National Student Financial Aid Scheme (NSFAS) debt being blacklisted. 

The controversial issue is Regulation 18 (7)(e). It explained that organs of state, courts, utilities suppliers and educational institutions can approach a registered credit bureau to receive, compile and report the credit status and financial position of a person or consumer. 

Since educational institutions provide a service, this amendment would have provided a legal basis for them to report on a student’s payment history to a credit bureau, raising the fear of being blacklisted. However, the regulation was withdrawn on 11 September.

Last month, News24 reported that eight universities were owed R8.8-billion by students at the end of December 2024.

Read more: South African students still battling ballooning debt despite protests and promises.

Student opinions

Daily Maverick spoke to Cape Peninsula University of Technology (CPUT) graduate Akhona Ntotho, who owes the university student fees, about what this withdrawal means to her.

“It means absolutely nothing. We have a government that thinks it can implement laws and regulations as it sees fit. If they have the strength to implement such, why don’t they implement laws that enable students to receive their qualifications, because they can make rulings? As youth, we have the power to put corrupt leaders down,” said Ntotho.

Meanwhile, an alumnus from the University of the Witwatersrand, now studying at the University of Cape Town, who asked only to be called Khanyi, said the withdrawal brought “a huge sense of relief”.  

“I was concerned about being blacklisted for owing the institution. Not being able to afford fees is beyond our control. We want to pay fees. No one is proud of not being able to afford fees. 

“I feel like they were taking their chances with this regulation. Meaning that if we had kept quiet, they would’ve continued passing it, knowing very well that it would be unfair and oppressive. So the government is willing to punish us if we don’t speak out. The department needs to find better ways of dealing with student debt instead of ‘threatening’ marginalised students,” said Khanyi.

Read more: Graduates welcome EFF proposal of Bill aimed at settling student university debt

DTIC on withdrawal

Department of Trade, Industry and Competition (DTIC) spokesperson Kaamil Alli confirmed the withdrawal to Daily Maverick. “The withdrawal is not an admission that the proposed regulations would have introduced new measures that affect students. Rather, the withdrawal is a way to recognise the public’s objection to the 2006 provisions, which do affect students,” he said.

The withdrawal was due to the overwhelming response, with more than 20,000 submissions opposing these regulations. “The vast majority of the responses were opposed to the proposed regulations,” said Alli.

When Daily Maverick spoke to Alli on 9 September, he said the DTIC wanted to help small businesses, not harm students. “Under the previous regulations, financing institutions couldn’t access formal histories of MSMEs [micro, small and medium-sized enterprises] with respect to credit, and therefore would not be able to do risk assessments to give small and medium enterprises credit lines. 

“The draft – what it does is try to eliminate that gap to provide for MSMEs to access formal financing so that they avoid informal lending, with very high interest rates, and very poor credit agreements that they would usually enter into in the informal sector, which prejudices them and disadvantages them and prevents growth within the sector,” said Alli.

He added that the department remains committed to creating an enabling environment for MSMEs to access formal financing.

Accounts from activists

Daily Maverick spoke to #FeesMustFall social justice activist and lecturer Busisiwe Seabe, who said the withdrawal of these regulations is not a triumph of government “robustness”, but a public repudiation of state incompetence. 

“Minister Tau and his department are now trying to dress this up as proof of a healthy democracy, but let’s be honest: this was not collaborative policy-making, it was a failed attempt to smuggle predatory regulations past the people… This exposes how careless and anti-poor this administration has become. 

“Instead of protecting students, the department tried to introduce rules that would have opened the door for financial exploitation by treating universities like credit bureaus. They were wrong from the start, and it took the collective power of students and young people to stop them.”

Seabe added: “The state exists to serve the people – not banks, not private interests, and certainly not to trap students in cycles of debt.”

Daily Maverick also spoke to activist and consultant Sabelo Chalufu, a former director of executive support and councillor at the City of Johannesburg. Chalufu led a petition to reject the drafted regulations by DTIC.

“I am glad that they have withdrawn this thing, and it’s a progressive step. Obviously, it is made under pressure. The risk to students is not fundamentally dealt with by simply withdrawing this,” said Chalufu.

“What the withdrawal does is only protect in terms of the worsening that would have happened, but people are already being blacklisted right now under the current regulations, and that is something that still needs to be addressed.”

Chalufu’s petition, which demanded that the regulations be reversed, reached more than 190,000 signatures. 

Meanwhile, when Daily Maverick spoke to EFF MP Sihle Lonzi on 8 September, he said DTIC is attacking students. Lonzi opposes these amendments. 

“We hold the view that this is the greatest onslaught and attack on young people since the advent of democracy. Institutions of higher learning withhold degrees, qualifications and certificates of students who owe debt. That’s already punishment. 

“Now, this government of the ANC, through the DTIC, wants to introduce another punitive punishment… How is someone sitting at home, who doesn’t have a job, relying on the R350 Sassa grant, going to pay back their debt?”

Educational institutions

Before the withdrawal occurred, Daily Maverick had spoken to institutions to assess whether they planned to use this as a tool to recoup money. 

“CPUT has a student debt of R1.8-billion, and we are actively exploring all ways of reducing that amount. We do currently use debt collectors when all other means of collection are ignored by the former student... Our finance team looks at any and all new developments, financial risks and changes to credit acts to correctly anticipate and pre-empt any potential pitfalls or opportunities. Any chance to recoup outstanding debt will be explored,” said CPUT spokesperson Lauren Kansley.

UCT and UWC said they had not decided on the proposed amendments, as this was still not law, and they were reviewing. “At the end of 2024, UCT reported a total outstanding student debt of R864-million, which included unpaid fees from 2024 and prior academic years. By August 2025, this had decreased to R537-million,” said UCT spokesperson Elijah Moholola.

Meanwhile, Stellenbosch University’s Martin Viljoen said amendments were under review. “The university does not share student information with credit bureaus and will most likely not use credit bureaus going forward,” said Viljoen.

NSFAS and student loan issues

NSFAS repayments start when an employed beneficiary is earning more than R30,000 annually. Students or unemployed beneficiaries are exempt. Non-paying beneficiaries face direct salary deductions via the employer contact. NSFAS notifies students and sureties, allowing 14 days before a credit bureau listing, which impacts credit scores.

Read more: Students out in the cold as NSFAS faces R10.6bn budget shortfall for universities

"We can't blacklist students because this government punishes students when they owe fees. They don't give them their qualifications. This is what the EFF student debt bill seeks to fight. We've already informed the parliament that we want to actually introduce an amendment to the National Credit Act so that we can make it explicit in the Act that no educational institution must be allowed to submit and surrender our young people to the credit bureaus." Lonzi told Daily Maverick on Friday after the DTIC's withdrawal.

“They would never withdraw a decision when they know that they've done everything according to the rules. They only fold when they can see that they have been caught in some criminal activity that they're trying to do. The story of small businesses does not exist; they people want to criminalise students,” Lonzi said.

The public had until Friday, 12 September, to comment on the new proposed amendments, which have now been withdrawn. DM