Student debt written off due to bankruptcy
Millions of dollars of student debt written off due to bankruptcy.
The recently released Student Loan Annual report concedes that 326 people had their student debt written off due to bankruptcy over the 2002/2003 year. According to the report the amount written off equated to over $3.5 million.
“This proves that the burden of student debt is becoming too much for some to handle, and sadly more and more good people are declaring themselves bankrupt to rid themselves of their student loan.” Said Andrew Kirton, Lincoln University Students’ Association President.
Student debt still increases by $40,000 per hour and will reach $7 billion in 2004. One in ten New Zealanders now has a student loan.
“If the enormous negative social and financial implications of declaring yourself bankrupt are no match for the benefit of becoming debt free, then I suggest we have a real problem in this country.” Kirton said.
The amount written off due to bankruptcy has tripled since 1998, increasing from $1.1m to $3.52m this year. “The government must act now to put a stop to the monster of debt suppressing our best and brightest graduates. Student debt must be immediately contained before it becomes an economic nightmare.” Kirton said.
Kirton said that one way individual student loans
could be decreased would be to introduce a student allowance
for all students, so that over 2/3 of tertiary students
wouldn’t have to borrow money from the loan scheme just to