Government to Blame for Soaring Student Debt
Wednesday 20 Feb 2002
ACT Tertiary Education Spokesman Dr Muriel Newman says the Labour/Alliance Government is squarely to blame for the soaring indebtedness of young New Zealanders through the student loan scheme.
"Practically the first thing this Government did on taking office was breathlessly remove interest payments on loans while people are studying. Now we are seeing the results. Total debt has blown out from $3.1 billion in November 1999 to $5 billion.
"But more significantly still, the size of loans and debts to individual students are soaring. Official figures show that in 1999 the average student loan taken out was $4917. Following the imposition of the interest-free regime this average figure had soared 35 percent to $6669 by last year. Average student debt has risen in the same period from under $12,000 to $12,750.
"Clearly, policies aimed at the student loans and the time when somebody is engaging in study are not the answer.
"The problem is the debt our young people face when they enter the workforce. This Government's flawed policy is ensuring that our young face ever growing debt mountains which will take them years to get rid of.
"ACT says the solution lies in targeting the debt and getting this paid off as quickly as possible. This can be achieved through the tax system - offering tax relief and lower tax rates," Dr Newman said.