EFF wants to introduce bill to prevent students choosing either lifelong debt or unemployment

The EFF has introduced a private member’s bill to Parliament that aims to clear all student debt in South Africa, estimated at approximately R17 billion.

The proposed legislation, led by EFF MP Sihle Lonzi, seeks to address what the party describes as both a social and economic justice issue.

The bill’s primary objective is to prevent institutions from withholding qualifications due to outstanding fees, a practice that Lonzi argues creates a significant barrier to employment.

“The bill says number one there must be no student whose degree, [or] whose certificate, [or] qualification is withheld because they owe the universities,” said Lonzi.

Statement on EFF’s Student Debt Cancellation Bill.

The EFF’s Bill and noble cause to clear all student debt is a necessity, which the
people of South Africa, in particular the youth, must rally behind to defeat inequality and break the chains of financial dependency and bondages… pic.twitter.com/H9rvZ1cW6v

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Financial tips for parents preparing for their children’s first year of varsity

— Economic Freedom Fighters (@EFFSouthAfrica) January 8, 2025

Student debt heavier burden on black youth – EFF MP

The legislation targets historical inequalities in South African society, with Lonzi highlighting that black students, especially black women, bear the heaviest burden of student debt.

“The exorbitant costs of higher education in South Africa have led to a limited output of graduates, with black students being the most affected by this. Young people in South Africa are faced with two undesirable scenarios: i) to begin their work lives with huge sums of debt that imprison them in a permanent cycle of debt for the rest of their lives, or (ii) to remain jobless and economically inactive, as their qualifications are withheld by tertiary institutions because of their debt.”

Lonzi emphasised that cancelling student debt is urgent, highlighting that the country has the “highest levels of unemployment in the world, particularly among youth”.

“The devastating effects of debt on the credit ratings of young people further alienate the majority of black youth from financial institutions and restrict them from participating meaningfully in the economy.”

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Implementation of bill

The bill is currently under review by parliamentary legal advisors, with public consultations expected to follow.

According to Lonzi, the process could be completed within three to four months.

The EFF MP added that the legislation will prioritise South African students and consider income threshold models similar to those used in the United Kingdom and New Zealand.

Using tax to clear student debt

To fund this ambitious proposal, the EFF suggests implementing a 1% wealth tax and increasing corporate taxation.

Lonzi points to historical precedent, noting that “during apartheid… the apartheid was a welfare state” with higher corporate tax rates.

The bill doesn’t propose eliminating educational costs entirely but rather shifting the funding burden to the government to maintain educational standards and operations.

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Challenges for academic institutions

Education expert Hendrick Makatina supports the initiative, highlighting its potential benefits for graduates.

“This will give the students a chance to because many of our students owe a lot of money to institutions of learning. And once the debt is cancelled, it means that at least they will be able to start a life without the burden of having a debt on their shoulders,” he said.

However, Makatina acknowledged potential challenges for institutions: “If institutions say, ‘here’s the degree’, the student might just take it and go. And once they start working, they may not pay back the money.”

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