Withdrawal of amendments to the National Credit Act demonstrates the power of public participation

Access to Higher education in South Africa has been a contested space since the dawn of democracy. In 2016, the Fees Must Fall generation made a striking demonstration and called for access to free education, a valid call considering the inequality in the country and drew on public support for the cause, where many South Africans could relate to being affected by.

Recently, the Department of Trade, Industry and Competition (DTIC) drew public outcry when news of the amendment of the National Credit Act gained popularity. Since the inception of the National Student Financial Aid Scheme (NSFAS), more than 5 million beneficiaries have been supported in the form of student aid. The implementation of the National Credit Act would have meant that those who still owe NSFAS would be blacklisted and potentially barred from taking further loans or enjoying the benefits of using credit.

In response to this, public outcry grew and resulted in a petition being drawn. Within a week, the petition received close to 200,000 signatures, highlighting the public’s discontent with the amendment. Following this, the department has since withdrawn the proposed amendments. This move marks an affirming role of public participation in democratic processes and signifies what can happen when an organised group invests in public affairs and engages office bearers.

The proposed amendments by DTIC to the already existing National Credit Act (35 of 2005), which makes provision for the protection of consumers in the lending and borrowing space, were simply effected to include institutions of higher learning as part of the entities that could hand over student debt information to credit bureaus. This, a decision that would have a debilitating effect on the thousands of graduates who once relied on the National Student Financial Aid Scheme (NSFAS) and other lenders to finance their education using loans. As this means those with outstanding debt can be blacklisted or have their debt handed over to debt collectors, potentially affecting their ability to acquire further loans or have healthy credit records.

Meanwhile, the National Credit Act was introduced as a means to regulate the credit market in an attempt to protect consumers and ensure equitable access to credit. However, if the amendments had been enacted, this would have negatively impacted the thousands of students who are still struggling to settle their NSFAS loans.

It was this realisation that sparked the outrage witnessed a few months ago when videos and petitions were circulated on social media.  The news of the proposed amendments sent a frenzy across South Africans, with many sharing that they had received communications from attorneys and debt collectors demanding payment of outstanding loans they had received through NSFAS. While the amendments were simply affecting a clause to allow more entities to submit consumer credit information to credit bureaus, collected from educational institutions, entities investigating fraud cases and judicial officers, to mention a few. This was made in an attempt to ensure improved credit risk management and enhance access to financing for MSMEs to help grow the sector and improve access to formal financing, as stated according to the DTIC.

Despite this, NSFAS, as a financial aid scheme, can establish debt to be payable once a beneficiary qualifies to repay the loan. This is established by looking at whether the beneficiary is employed and earns R30 000 per month, information of which is accessible through the South African Revenue Service (SARS). This only applies to beneficiaries who received NSFAS loans before some of the clauses allowed for the loan to be converted into a bursary.  This is being done to recover funds to allow future applicants to access NSFAS loans as well. NSFAS CEO Waseem Carrim expressed that loans owed by graduates have to be repaid, and further steps have been taken to ensure this debt is recovered.

Access to higher education in South Africa is considered a privilege that only a few can access. Recent reports by the Minister of Higher Education reveal that out of 850,000 applications received by institutions of higher education, admission space can only be provided for half of those applicants. Coupled with the funding challenges with NSFAS, the situation seems bleak.  The fortunate students who form part of those who can access higher education sometimes graduate into a life of unemployment, where they struggle to secure long-term, sustainable employment opportunities. While carrying the burden of unpaid educational loans, which were acquired in hopes that they would be the key that unlocks better opportunities.

Adding to the ever-growing unemployment crisis. The presence of employability programmes such as Nasi ispani, teacher assistants, crime wardens, also known as amapanyaza, EPWP and volunteer food handlers, is often insufficient towards addressing long-term unemployment, as appointments are made on a rotational basis, with Gauteng Premier Panyaza Lesufi echoing that these programmes exist to solve the immediate challenge of unemployment by granting beneficiaries short-term contracts that make them employable.

The power of public participation

Despite the current financial landscape for higher education funding, unsustainable job creation programmes, thousands responded with urgency to the announcement by DTIC. The uproar resulted in the withdrawal of the amendment before public comments had even drawn to a close, which is a rare occurrence.  This withdrawal by DTIC, albeit met with criticism from the business community, signals the power of coordinated public action. However, the end is not near; key developments around the withdrawal of the amendments still have to be monitored particularly as it relates to how  competing interests from both the private sector and former beneficiaries of educational loans will be balanced out.

However the demonstrated power of coordinated public action exhibited throughout this process should be funnelled towards civic processes such as parliamentary committee meetings where student issues are debated. There should be greater coordination between policy-making and the equal inclusion of all affected stakeholders. Such an environment gives rise to policies that solve our immediate challenges without disadvantaging previously disadvantaged groups.

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References:

BASA slams Parks Tau for withdrawing draft changes to National Credit Act. News24. https://www.news24.com/business/economy/basa-slams-parks-tau-for-withdrawing-draft-changes-to-national-credit-act-20250915-0349

Enhancing consumer identity protections: New amendments to the National Credit Act by Angela Itzikowitz, Era Gunning and Amelia Warren for ENSight. 15 August 2025. https://www.ensafrica.com/news/detail/10614/enhancing-consumer-identity-protections-new-a

Higher Education Minister warns of limited spaces for matriculants in 2026 by Simon Majadibodu for Cape Argus. 16 September 2025.  https://capeargus.co.za/news/2025-09-15-higher-education-minister-warns-of-limited-spaces-for-matriculants-in-2026/

I received an NSFAS loan in 2017 that was converted to a bursary in 2018. NSFAS wants me to pay the money back, but I can’t afford to. What should I do?. GroundUp. https://groundup.org.za/qanda/1001/

National Credit Act. Banking Association of South Africa. https://www.banking.org.za/consumer-information/consumer-information-legislation/national-credit-act/

National Credit Act Amendment Regulations. Department of Trade, Industry and Competition. 13 August 2025. https://www.gov.za/sites/default/files/gcis_document/202508/53154rg11867gon6510.pdf

NSFAS cracks down on former students who owe billions by Aiden Daries for Cape Town ETC. https://www.capetownetc.com/news/nsfas-cracks-down-on-former-students-who-owe-billions/

Panyaza Lesufi’s Nasi iSpani is plagued by payment chaos while the relaunch looms by Lerato Mutsila for Daily Maverick. 19 June 2025. https://www.dailymaverick.co.za/article/2025-06-19-panyaza-lesufis-nasi-ispani-plagued-by-payment-chaos-while-relaunch-looms/

Tau halts National Credit Act amendment after large public criticism by Tshepo Mongai for SABC News. 12 September 2025. https://www.sabcnews.com/sabcnews/tau-halts-national-credit-act-amendment-after-large-public-criticism/

Tau withdraws NCA amendment regulations amid growing concerns by Lehlohonolo Lehana for Fullview. 11 September. https://fullview.co.za/tau-withdraws-nca-amendment-regulations-amid-growing-concerns/

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About the Author:

Thabisile Miya is a member of the Activate Change Drivers Writing Hub. She is a Master’s candidate in the field of governance and public policy at the University of the Witwatersrand. She is passionate about digital media and advocacy.