Trade Minister Parks Tau withdraws student blacklisting plan after public outcry

Minister of Trade, Industry and Competition, Parks Tau, has withdrawn draft regulations that could have resulted in the blacklisting of individuals with student debt, following widespread public backlash.

The withdrawal follows widespread public outcry, including strong opposition from student unions, political parties, and students across the country.

The proposed changes, which aimed to improve consumer protection and tighten credit checks, were included in recently gazetted draft amendments to the National Credit Act of 2005, which had been released for public comment.

Tau had defended the amendments as measures to strengthen consumer protections, enhance the way credit bureaus handle customer information, and improve affordability assessments. 

The draft rules also proposed allowing credit bureaus access to data held by state entities involved in fraud investigations, as well as consumers’ criminal records.

Despite this, Tau said the withdrawal followed an “overwhelming response” from the public. 

More than 20,000 submissions had been received by the department even before the closing date for public comment on September 12, 2025.

“The vast majority of the responses were opposed to the proposed regulations,” said Tau. 

“This process has once more demonstrated the robust nature of South Africa's democracy, where the public is able to engage with the government in an open and transparent manner.”

Tau said he will be initiating a new process that would consider changes required to enhance the protection of students, while continuing efforts to improve access to finance for micro, small and medium enterprises (MSMEs) to help close the existing credit gap.

The Economic Freedom Fighters (EFF) welcomed the withdrawal, claiming it as a political victory.

“This retreat by the Department of Trade, Industry and Competition 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 South Africa,” the party said.

“From the beginning, the EFF rejected these regulations as an attack on the youth and the poor, and demanded that 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 this matter, and we placed it firmly on the national agenda.”

The party’s youth wing, the EFF Youth Command, had planned a nationwide mobilisation and protest march to the department, condemning the regulations as punitive towards students and the poor.

The South African Union of Students (SAUS) also welcomed the withdrawal. 

SAUS president Siyabonga Moses Nkambako said it followed numerous submissions from the union, student representative councils across the country, civil society, young professionals, and students at large.

“Outside of it being rejected by many South Africans via the submissions, this withdrawal is a strong sign to the government that young people will not sit and watch as the government gambles with their future and puts them at risk of a lifetime of debt,” said Nkambako.

He said the proposal would have led to the blacklisting of students, affecting their employment prospects and exacerbating the unemployment crisis.

“We strongly opposed and rejected these amendments as they aimed to trap students in a life of debt, poverty and unemployment, which would have subsequently led to depression.”

Nkambako added that the draft regulations also impacted young graduates who are unable to access their academic records due to outstanding fees, preventing them from fully participating in the job market.

“NSFAS students are also affected, because in many instances, the scheme does not pay on time or at all, as is the case with allowances. A systemic failure by the government was going to be transferred to unsuspecting, innocent students simply because they cannot afford to pay fees,” he said.

“This is the first step of many of our biggest victories as a united front of students and young people in South Africa. The clearing of historical student debt remains the only logical and acceptable solution for the union.”

Fighting For Better, a public leadership and governance advocacy group, also welcomed the withdrawal.

The organisation said the regulations would have “entrenched unemployment, deepened hardship, and compromised the futures of millions of South Africans - particularly students - by subjecting them to unjust blacklisting and credit bureau reporting”.

“Tau’s withdrawal is a step in the right direction, but the regulations as they stand are still a danger to the futures of many,” said Sabelo Chulufu, an activist with the group.

“As has become evident, students remain at grave risk of being blacklisted and handed over to debt collectors. Many have confirmed they are currently living through this tyranny while simultaneously battling unemployment and underemployment,” he said.

simon.majadibodu@iol.co.za

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