Trade, industry and competition minister Parks Tau has withdrawn controversial draft regulations that would have allowed educational institutions to be listed as “originators of credit information” under the National Credit Act.
This comes after an avalanche of opposition from the public.
Tau said the department received more than 20,000 submissions against the proposal even before the deadline for public comment on September 12.
“Minister Tau’s decision was informed by the overwhelming response, comprising more than 20,000 submissions. Most responses opposed the proposed regulations,” the department said.
“The process has once more demonstrated the robust nature of SA’s democracy, where the public is able to engage with government in an open and transparent manner.”
The draft regulations, published in the Government Gazette on August 13, would have allowed institutions to report unpaid tuition and fee arrears to credit bureaus.
Critics feared this would effectively “blacklist” students, saddling them with negative credit histories before they graduated. Opponents argued blacklisting could harm credit scores and restrict access to loans, mortgages and jobs. Many also said it would entrench inequality since students from low-income or historically disadvantaged backgrounds were more likely to struggle with tuition payments.
Other concerns included the following:
- Debt disputes, errors and unclear thresholds could leave students unfairly penalised;
- Unpaid fees might discourage students from enrolling or completing their studies; and
- The move conflicted with national goals to improve access to higher education, reduce unemployment and tackle inequality.
The department insisted the proposal was not aimed at unfairly targeting students but rather at improving access to finance for small businesses.
“Minister Tau has committed to undertaking a process that will consider the changes required to enhance the protection of students, while continuing with efforts aimed at improving access to finance for SMMEs to plug the credit funding gap that exists.”
It said Tau would “engage relevant stakeholders to further clarify the process allay any fears with respect to the outcomes”.
The EFF, which has opposed the draft since its publication, claimed victory.
“The retreat by the department is not an act of goodwill by the ANC-DA led government but the direct result of sustained pressure led by the EFF, members of society, professionals and the youth of SA,” the party said.
“From the beginning, the EFF rejected the regulations as an attack on the youth and the poor and demanded they be abandoned in their entirety. We formally called for a joint sitting of the portfolio committee on trade, industry and competition and the portfolio committee on higher education to deal with the matter, and we placed it firmly on the national agenda.”
TimesLIVE
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.