Education Policy | Post Primary | Preschool | Primary | Tertiary | Search


Increase in inflation adjustment rate bad news

Forty seven percent increase in inflation adjustment rate bad news for students

The Aotearoa Tertiary Students' Association (ATSA) notes that the reduction in the base interest rate (from 5.1% to 4.2%) means that debtors to the Student Loan Scheme eligible for base interest right-offs will face increases in their total debt burden.

"While students may have some cause for slight satisfaction that the government continues to maintain the total student loan interest rate at seven percent, the balancing of the base and interest adjustment rates to maintain this 'headline rate' is unsatisfactory, and hides one of the real faults of the student loan scheme," ATSA President Julie Pettett sated today. "What it means to student loan borrowers on low incomes is that they will have a smaller amount written off their interest than was formerly the case."

ATSA suggests that 47 percent increase in the CPI (from 1.9% to 2.8%) used to calculate the 'interest adjustment rate' should be used to adjust the repayment thresholds which trigger base interest right offs. "This would help signal to borrowers that the government was genuinely interested in reducing the debt burden imposed on students, their families and the community," Pettett stated. "In the case of this latest change, it would increase the repayment threshold from $15,964 to $23,467. This is still well below the average wage, but would help to reduce the actual cost increases that low income borrowers now face because of base interest rate reduction."

ATSA expects that real movements towards reducing the costs of tertiary education to students will be offered in the government's review of student financial support "This latest change in the interest rate calculations illustrates some of the absurd contradictions in the current scheme," Pettett concluded.

© Scoop Media

Culture Headlines | Health Headlines | Education Headlines

At Bats: Locke - The World Theatrical Premiere

On the eve of the biggest challenge of his career, Ivan Locke receives a phone call that sets in motion a series of events that will unravel his family, job and soul... More>>

Other Elections: Kea Crowned Bird Of The Year

These large, green mountain parrots are known for their curiosity and intelligence. Once numbering in the hundreds of thousands, they are now classified as Nationally Endangered with just 3,000 - 7,000 birds remaining. More>>


Howard Davis Review: Conflict & Resistance - Ria Hall's Rules of Engagement

From the aftermath of war through colonisation to her own personal convictions, Hall's new CD addresses current issues and social problems on multiple levels, confirming her position as a polemical and preeminent voice on the indigenous NZ music scene. More>>

Howard Davis Review: Another Time, Another Place - David Friesen Trio Live

"It has been said of David Friesen that he does for the art of bass playing what Pythagoras did for the triangle" - Patrick Hinley, Jazz Times. At Wellington's newest jazz venue, the cozy and intimate Pyramid Cub, the trio clicked together from the opening bars, presenting many of the tunes from their marvelous new recording. More>>

Howard Davis Review: The Father - Descending Into The Depths of Dementia

Florian Zeller's dazzling drama The Father explores the effects of a deeply unsettling illness that affects 62,000 Kiwis, a number expected to grow to 102,000 by 2030. More>>