“It is hardly surprising that student loan figures are rocketing,” said ACT Tertiary Education Spokesman Stephen Franks.

“We should be worried about the intelligence of New Zealand students if their loans were not ballooning. Under Labour’s loan scheme student debt will reach $6 billion by 2003, under the old scheme this would not happen until 2005. When Labour made student votes their highest education priority by promising interest free money, it would be shattering if students had failed to take advantage of the situation.

“Financially sophisticated students will also have seen Finance Minister Cullen’s ‘doubts’ about the true value of the Government’s student loan ‘asset’. A clear signal that it might be written off some day. That prospect could make mugs out of any student (or their family) that fails to borrow under the scheme.

“Much of this new money has gone to students who last year borrowed less or didn’t borrow at all. They came from already well off families, were determined to get by, or had saved during their holidays.

“This is desperately sad. The lessons for our most promising young people are all wrong. They are being encouraged to borrow, and then, with a large loan and an increased top tax rate, being encouraged to leave New Zealand.

“This is the worst aspect of Mr Maharey’s little vote catching scheme.
“Because there is no arrangement for collecting loans when graduates are overseas, the scheme becomes a giant subsidy for the permanent emigration of our most promising people, after their training at the expense of ordinary New Zealand working families who pay tax.

“If Labour had been concerned about education values instead votes, the extra hundreds of millions now pouring out as student loans would have been dedicated to real education needs, like improving woeful science and maths statistics, raising academic salaries and conditions, and maintaining rigorous standards.

“As a country we have borrowed to keep up our living standards for the last forty years. Now the Government is happy to erode the integrity and self reliance of even those best able to look after themselves.

“The message to young New Zealanders who are not sucking on the Government for their start in business, is - start clamouring for it. Why shouldn’t they demand that the Government lend them the money for their first farm or their first courier van. The Government has bought the votes of young professionals by paying for their first career asset, namely their qualifications,” said Stephen Franks.

ENDS

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