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


Student Loan Policy Is Increasing Cost To Taxpayer

Official report exposes student loan policy's increasing cost to taxpayer

The student loan no-interest policy is costing taxpayers more and more, the Education Forum has found in figures in the recently-released Student Loan Scheme Annual Report.

The Education Forum has found the report shows the no-interest student loan policy introduced last year has led to more student loan borrowers, more borrowing and a steep fall in loan repayments from borrowers.

According to the report:

* The number of students borrowing under the loan scheme rose by 8.4% between 2005 and 2006, while the value of loans drawn down during the year increased by nearly 12%. Both occurred despite a decline in the number of government-funded students.

* The student loan uptake rate among full-time students rose from 76% to 82%.

* The report also shows that the value of interest write-offs under the loan scheme more than doubled from $254 million in 2005/06 to $558 million in 2006/07; while borrower loan repayments (those made directly by borrowers, rather than through employer deductions) dropped sharply from $173 million 2005/06 to $142 million in 2006/07 (versus $239 million in 2004/05).

* The cumulative impact of the government's successive introduction of its no-interest student loan policy in 2000 and 2006 has been even more significant, with the student loan uptake rate for full-time students increasing from 60% in 1999 to 82% in 2006 and interest-write-offs totalling $558 million in 2006/07 up from just $20 million in 1999/00.

"None of these effects is surprising. Indeed, critics of the policy change identified them at the time the policy was announced in the heat of the 2005 election campaign," said Education Forum policy advisor Norman LaRocque.

"While the cost of student loan write-offs - in terms of increased borrowings and lower repayments - is significant, the additional spending will do nothing to improve the standard of teaching or research at New Zealand tertiary institutions, nor will it help New Zealand tertiary institutions to compete in the increasingly global market for top-class academic staff," said Mr LaRocque.

The Ministry of Education report is at:


© Scoop Media

Culture Headlines | Health Headlines | Education Headlines

Handcrafted Form: Rare Treasures From Japan

This unique exhibition at Expressions Whirinaki represents 90 everyday objects made by contemporary Japanese artisans who employ various traditional craft techniques made in regional workshops. The works used in daily life are crafted from raw materials with techniques appropriate to bringing out the best of its medium, balancing ease of use with aesthetic appeal. More>>

Howard Davis Article: A Musical Axis - Brahms, Wagner, Sibelius

Brahms' warm and exquisitely subtle Symphony No. 3 in F major, Wagner's irrepressibly sentimental symphonic poem Siegfried Idyll, and Sibelius' chilling and immensely challenging Violin Concerto in D minor exemplify distinct stages of development in a tangled and convoluted series of skirmishes that came to define subsequent disputes about the nature of post-Romantic orchestral writing well into the following century. More>>


Scoop Review Of Books: A Pale Ghost Writer

Reviewed by Ruth Brassington, Richard Flanagan's new novel is about a novelist hastily ghost-writing the biography of a crook about to go to trial. The reader is kept on a cliff-edge, as the narrator tries to get blood out of his stone man. More>>

New Zealand Wars Commemoration: Witi Ihimaera's Sleeps Standing Moetū

The second of several articles to mark Rā Maumahara, remembering the New Zealand Land Wars. The first was a Q&A with Vincent O’Malley, author of The Great War for New Zealand: Waikato 1800–2000. More>>




  • Wellington
  • Christchurch
  • Auckland