Student Debt to Be Listed with Credit Bureaus

The South African Department of Trade, Industry and Competition has recently submitted a draft proposal to amend the National Credit Act, allowing student debt to be officially listed with credit bureaus such as the Credit Information Bureau (CIB). This means that unpaid student fees and loans could negatively affect a young person’s credit record, making it harder to access financial services soon after graduation.

The proposed amendment aims to clarify the obligations of educational institutions to report outstanding debts to credit bureaus as part of broader efforts to strengthen consumer protection and improve credit regulation transparency. While this brings greater legal certainty, it also raises significant concerns among students and youth organisations.

The South African Union of Students (SAUS) and other groups have strongly opposed this move, stating it will trap students in a cycle of debt and hinder their economic empowerment. SAUS spokesperson Thato Masekoa describes the proposal as a betrayal to the generation that fought for free education, warning that blacklisting young graduates could worsen unemployment and make financial independence even harder. They argue current practices, where universities withhold diplomas for unpaid fees, already impose harsh consequences, and adding credit bureau listing would make matters worse.

Political activists including EFF MP Sihle Lonzi have also criticised the draft regulation as a “cruel attack” on poor youth, reinforcing that listing student debt with credit bureaus further entrenches inequality by limiting access to essential loans like home loans and vehicle finance.

The draft amendments are open for public comment until 12 September 2025, inviting stakeholders to share their views on how best to balance the need for financial accountability with social justice and youth empowerment.

For students, the implications are significant:

• Unpaid student debt may affect creditworthiness for years after graduation.
• This could limit opportunities to rent or purchase property, access credit cards, or secure business loans.
• It increases pressure on students to manage finances carefully and seek help before debts spiral.

The proposed changes signal a major shift in how student finance is treated in South Africa’s credit ecosystem. While accountability is important, many call for complementary measures like debt relief funds, payment plans, and policies that protect vulnerable students during and after their studies.