Student Debt Set To Cripple NZ

Student debt will cripple the economy within the next two decades unless the government moves with some urgency to address the increased financial burden that has been placed on students over the past decade according to Chris Hipkins, President of the Victoria University of Wellington Students’ Association.

Figures released to VUWSA under the Official Information Act yesterday show that projections for total debt accumulated under the student loan scheme have almost doubled since a similar analysis was released in 1999.

“In 1999 the Government was projecting student debt to hit $11.6b in 2020. Today that figure has rocketed up to $19.4b. It won’t be long before accumulated student debt is the single largest item on the government’s balance sheet,” Mr. Hipkins said.

“The Government presently records student debt as an asset, but the truth of the matter is they still haven’t reached a point in time where repayments will equal drawings, so total accumulated debt will continue to grow indefinitely,”

“The current generation of politicians are mortgaging the future of our country. The burden of this will not only be felt by students who graduate with large debts, but also by the future taxpayers of New Zealand who will be left to clean up the mess,”

“While we welcome the recent moves the government has made towards freezing fees and easing loan repayment conditions, it is now clearly apparent that this is nowhere near enough. If we are to get this debt under control fees must come down and access to living allowances will have to increase,” Mr. Hipkins said.

“It’s time for the government to bite the bullet and make tertiary education a much higher priority. The short-term costs of increasing our investment in educating future generations of New Zealanders will be more than outweighed by the benefits,” Mr. Hipkins concluded.

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Projections for total accumulated student loan debt*

1999 figures released by then Minister for Tertiary Education Max Bradford in response to a parliamentary question by Labour MP Steve Maherey.

2001 figures released by Associate Minister for Education (Tertiary) Steve Mahery in response to a request under the Official Information Act by VUWSA President Chris Hipkins

Projections in 1999 Projections in 2001
1999 $3,245.6 1999/00 $3,520.8
2000 $3,782.5 2000/01 $4,514.2
2001 $4,293.2 2001/02 $5,250.1
2002 $4,775.5 2002/03 $5,982.4
2003 $5,252.6 2003/04 $6,730.1
2004 $5,733.0 2004/05 $7,481.3
2005 $6,244.5 2005/06 $8,236
2006 $6,690.5 2006/07 $9,006
2007 $7,133.6 2007/08 $9,814
2008 $7,553.2 2008/09 $10,625
2009 $7,954.8 2009/10 $11,450
2010 $8,328.6 2010/11 $12,270
2011 $8,715.9 2011/12 $13,070
2012 $9,082.5 2012/13 $13,860
2013 $9,460.8 2013/14 $14,670
2014 $9,825.8 2014/15 $15,500
2015 $10,209.8 2015/16 $16,300
2016 $10,593.9 2016/17 $17,100
2017 $10,940.9 2017/18 $17,800
2018 $11,289.1 2018/19 $18,600
2019 $11,626.2 2019/20 $19,400
2020 $11,928.8 2020/21

FOR FURTHER COMMENT CONTACT:
Chris Hipkins, VUWSA President
Phone (04) 473 8566 ext 830; Mobile (021) 707 927
Email: chris.hipkins@vuw.ac.nz

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