Credit act amendments spark student fury

Concerns over blacklisting vulnerable students with debt

- SIPHESIHLE BUTHELEZI

OPPOSITION is mounting against proposed changes to the National Credit Act (NCA) that seek to blacklist students for having outstanding debts, with youth advocacy groups and student organisations warning that the amendments could entrench cycles of poverty and exclusion among young South Africans.

The amendments, introduced by the Department of Trade, Industry and Competition (DTIC), would add educational institutions to the list of entities that can supply credit information to credit bureaus, alongside banks, courts, and debt collectors.

This means that unpaid student fees or other educational debts could end up on a young person’s credit record, leading to blacklisting.

Critics argue that the move could worsen the position of students who already struggle to graduate due to unpaid fees and further block their access to housing, loans, or financial services.

Youth Capital, a youth advocacy campaign, expressed alarm at the implications for young people who rely on credit to access education, start businesses, or cover the costs of seeking work.

“Youth Capital welcomes efforts to ensure that young people, who are often first-time borrowers, are safeguarded against unfair lending practices,’ said Buhle Magwaza, Project Lead at Youth Capital. “But these amendments can cause harm to young people, as students and hustlers turn to entrepreneurship as a survival strategy in the face of record unemployment.”

Magwaza argued that the framework treats defaults as individual failures without recognising the structural drivers of debt.