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Yet more evidence of loan scheme's failure

15 February 2000

Yet more evidence of loan scheme's failure

Green Party Youth Affairs Spokesperson Nandor Tanczos today said that banks offering special low interest loans to help students pay off their loans highlighted the need for urgent action to abolish the loan scheme.

"We were pleased to see Jim Anderton recently adopt Green Party policy on a debt write-off scheme for graduates who stay and work in New Zealand. However we were appalled with his suggestion that this scheme apply only to scientists and engineers," said Mr Tanczos.

"To make such arbitrary distinctions is inequitable and is not justifiable. The Green scheme applies to graduates who work in either paid or voluntary work and also includes a scheme which matches debt repayments dollar for dollar for graduates returning to New Zealand from overseas."

Mr Tanczos said the real issue was preventing more student debt from accumulating.

"With student debt predicted to hit $15 billion by 2015 the impact of the loan scheme on our young people and our national economy will be massive if action is not taken now. Currently we have seen some 'tinkering around the edges' when what this country really needs is for the loan scheme to be killed dead.

"The real issue that this Government must address is the funding of universities and living allowances for students. Funding for universities has been steadily decreasing and as institutions struggle to remain financially viable the costs are being transferred to students through sky-rocketing tuition fees.

"Students are having to borrow money both to study and to live at interest rates that exceed commercial rates. Saddled with huge compounding debts many students are fleeing the country to avoid paying back debt for the rest of their lives.

"If tuition fees were restored to sensible levels and students were encouraged to study through a living allowance there would be no need for the loan scheme. This is the challenge for this Government - to do something real for all those students who voted for a left wing government at the last election," said Mr Tanczos.

Nandor Tanczos: 04 470 6712, 025 246 5235 Jonathan Hill (press secretary): 04 470 6719, 021 440 090

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