Proposal To Increase Student Loans - More Than Meets The Eye
More than meets the eye with proposals to increase student loan borrowing
12 July 2017 - The New Zealand Union of Students’ Associations (NZUSA) says that there’s more than meets the eye with recent proposals to increase student loan borrowing.
ACT Party leader David Seymour has proposed an increase in the borrowing limit for living costs as part of the student loan, to meet rising rent costs. However, ACT continues to support adding interest on student loans.
‘There’s more than meets the eye with recent proposals to increase student loan borrowing. Let’s not forget that ACT is the only party in Parliament that supports interest on student loans, which means students will be hit with even higher debt as they go about their future’, says National President Jonathan Gee.
The national student loan balance now exceeds $15.3 billion.
Increasing borrowing limits created a stark contrast to Government’s recent Budget announcement of increasing the accommodation supplement for low-income households who weren’t students.
‘Why should every other low income New Zealander get an increased grant to help with living costs, yet students get increased debt?’
‘Students have told us that their immediate concern is not having enough to live on, but their long-term concern is graduating with less debt. A rise in the student loan living costs will be some welcome relief, but we cannot rely on a short-term solution to the long-term problem of debt’,
NZUSA’s 2017 Income and Expenditure Report found that 78% of students feel that their debt will have a significant impact on their ability to save for their retirement. It also found that loan repayment times have increased, including for Māori and Pasifika who take longer to pay off their debt than the rest of the population.
‘Tertiary education has the power to transform communities, especially for those from backgrounds of disadvantage. Student loan debt is shutting out Māori, Pasifika and people from lower socio-economic backgrounds from getting into degree-level study in the first place. It’s therefore no surprise that a whopping 90,000 young people are not in education, employment or training.’
‘Any party committed to a fairer society would genuinely address this inequality, and not just seek a quick fix.’
Instead, NZUSA supports a housing grant for all students (with regional variation) and unfreezing the parental income threshold for Student Allowance eligibility (which you do not have to pay back).
NZUSA is the national voice of students in tertiary education. The organisation is governed by students’ associations from universities and polytechnics around the country.