Latest Student Loan Figures Shocking

Figures released today by the New Zealand University Students’ Association (NZUSA) show that the biggest student loan is now $167,000, $27,000 more than the highest one last year. The figures were released to the association through an Official Information Act request from the office of the Minister of Revenue, Dr Michael Cullen.

“This new figure is simply shocking and demonstrates how out of control the student loan scheme is,” said NZUSA Co-President Andrew Campbell.

“It’s hard to see how a loan of that size will ever be paid back. Student loans are an economic shackle on graduates that will inevitably have a disastrous effect on both the economy and society,” said Campbell.

“The government needs to do more than simply tinker with the loan interest rate. The two primary causes of student loan debt are the lack of a living allowance for most students and high tuition fees. The government needs to address these two issues if it is truly committed to making inroads into the student debt problem,” said Campbell.

“Tertiary institutions also have the opportunity to mitigate the snowballing effect of the scheme by accepting the government’s fee freeze deal for 2002. If all universities rejected the deal and increased their fees by $500, the figure suggested by the Victoria University Vice-Chancellor, an extra billion dollars of debt will be accumulated over 10 years. Students simply cannot stomach that,” said Campbell.

“Students have suffered most from the failed user pays experiment in tertiary education over the past decade. The government has made small steps to cut the costs of tertiary education for students, but clearly much more needs to be done to ensure we have an educated and innovative society that is not burdened with massive debt,” said Campbell.

ENDS

Student Loan Update – March 2001

Total number of loan debts
In the period between April 2000 and March 2001, there were an extra 38,698 borrowers, or 13.88% This figure doesn’t include people who have just started studying this year, though it does include nearly all of the 2000 academic year loans.

Biggest loan debt
The biggest loan debt is now $167,000. Last year the figure was between $130,000-$140,000.

Range of Student Loan Debts
Below is a table of loan debts for the last three years. There’s been a slight decrease in the proportion of the bigger loan debts though it is interesting that loans over $50,000 have had a slight increase as a proportion of all student loans.

Range of Loan Balances Number and % of Borrowers as at 31/3/01 Number and % of Borrowers as at 30/4/00 Number and % of Borrowers as at 30/6/99
Under $5,999 120,265 (37.89%) 105,390 (37.82%) 95,035 (38.42%)
$6,000 - $9,999 61,126 (19.25%) 52,575 (18.86%) 48,170 (19.47%)
$10,000 - $14,999 47,971 (15.11%) 41,081 (14.7%) 38,865 (15.7%)
$15,000 - $19,999 28,182 (8.87%) 25,534 (9.16%) 22,716 (9.18%)
$20,000 - $24,999 19,325 (6.08%) 18,093 (6.49%) 15,485 (6.26%)
$25,000 - $29,999 13,057 (4.11%) 11,714 (4.2%) 9,909 (4.01%)
$30,000 - $34,999 9,617 (3.02%) 8,718 (3.13%) 6,834 (2.76%)
$35,000 - $39,999 6,207 (1.95%) 5,538 (1.99%) 4,129 (1.67%)
$40,000 - $44,999 4,384 (1.38%) 3,997 (1.43%) 2,810 (1.14%)
$45,000 - $49,999 2,693 (0.84%) 2,361 (0.85%) 1,467 (0.59%)
$50,000 - $54,999 1,771 (0.55%) 1,503 (0.54%) 879 (0.36%)
$55,000 - $59,999 1,042 (0.32%) 850 (0.3%) 465 (0.19%)
Over $59,999 1,754 (0.55%) 1,340 (0.48%) 604 (0.24%)
Total Borrowers 317,394 278,694 247,368

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