Dear Editor
The DA Students Organisation, DASO, calls for instigators of outrage to stop spreading misinformation that a new proposed rule allows legitimate student debt to be reported to credit rating agencies. This is misleading as these regulations have existed since 2006.
Educational institutions have been permitted to report legitimate student debt to credit bureaus since the original 2006 regulations under section 18(7)(e).
This is an instigated outrage that completely overlooks and downplays the real crisis in student funding.
The real crisis is not the National Credit Act regulations that have existed since 2006, but the systematic failures in South Africa’s student funding system that create unsustainable debt burdens, and fail to make payments when needed.
Students are suffering the consequences of NSFAS administrative failures, insufficient funding coverage, and poor debt collection systems that don’t differentiate between students who refuse to pay and those who can’t pay due to system failures. When ambitious students are failed by NSFAS payment failures, accused of personally being non-payers, and then handed over to credit bureaus, we witness a disgraceful injustice.
Students are being handed over to credit collection and credit rating agencies, because NSFAS is not paying what it owes. No student should face adverse credit reporting when their debt arises from NSFAS failing to pay institutions on their behalf.
DASO calls upon the Department of Higher Education to urgently implement an alternative funding model to address the root causes of student debt. Rather than simply opposing existing regulations, DASO advocates for a comprehensive alternative funding model, that addresses the sources, to be implemented now. The time for action is now.
The DA’s proposed tiered funding model provides targeted support for low-income families while extending assistance to the “missing middle.” The model includes salary-linked repayment that only begin once graduates secure well-paying employment, with merit-based scholarships and loan-to-bursary conversions for high achievers. Administrative reforms will decentralise NSFAS functions to institutions to reduce backlogs, while private sector partnerships will expand funding options.
DASO firmly believes that educational debt should not prevent economic participation for graduates.
We are focused on advocating for constructive solutions. The student debt crisis requires bold, comprehensive reform that provides adequate funding for students from all backgrounds, ensures sustainable repayment, rewards academic excellence, and leverages private sector partnerships to expand opportunities.
Our students deserve a funding system that empowers instead of penalises them for pursuing education.
Regards
Andrea Martinez
DASO Federal Chairperson