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Student Loan Debtors still likely to leave country

Press release

For immediate release

22 March 2000

Student Loan Debtors still likely to leave country despite Labour's loan changes

The Labour Party is trying to oversell the benefits of its student loan changes by predicting that students are now less likely to move overseas to avoid debt the National Student Unions said today.

Yesterday the Association Minister of Education (Tertiary) Steve Maharey said Labour's loan changes, including interest free student loans, lessened the debt burden placed on students and therefore they were less likely to move overseas.

However, calculations made by the National Student Unions show that the average university and polytechnic student undertaking a three-year programme will still graduate with a debt of at least $19,383 (university) and $17,577 (polytechnic).

"While students certainly appreciate interest free student loans, the government's policy change is in many respects cosmetic, as it does not address the real reason behind student debt - high fees and inadequate income support," said David Penney, National President of the Aotearoa Post-Compulsory Student Union (APSU).

"Mr Maharey's statement ignores the fact that under Labour, student loan repayments still kick in at $14,000, which create a high effective marginal tax rate for graduates just starting out in the workforce," said Sam Huggard, Co-President of the New Zealand University Students Association (NZUSA).

The National Student Unions say the government should be concerned by IRD figures that show in 1999, 68,000 student loan debtors did not file the compulsory tax return.

"This suggests that the number of former students that have fled overseas to avoid a lifetime of debt could be higher than the government thinks," said Sam Huggard.

"Students will be looking to the government to cut the cost of tertiary fees in the coming budget," said David Penney

ENDS

For more comment contact:

David Penney

APSU President

04 498 2501, 025 756 526


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