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Students stifled by overdue loans

Students stifled by overdue loans

The latest overdue student loan figures show that students are being caught in an ever-worsening cycle of debt, Green MP Nandor Tanczos said today.

The Green's Tertiary Education spokesperson was alarmed that the latest Inland Revenue report for the quarter ending March 31, 2003 showed the IRD was chasing more than $81 million in overdue loan payments.

This was $20 million more than the figure for the March 2002 quarter as the number of overdue borrowers swelled from 44,683 to 48,407.

"The student loan scheme obviously is not working when nearly 50,000 people can not keep up with their payments," said Nandor.

"It is farcical that the IRD is chasing 50,000 students, tarred with the same brush as tax dodgers," said Nandor.

"Despite the glib promises of a satisfying career through a better education, the reality for many students is that they can't get ahead in life because they're being caught in a poverty trap of the Government's making."

The figures also show that the amount of money in loans written-off due to bankrupt borrowers has doubled from $496,017 in the March 2002 quarter to $1,086,681 for the March 2003 quarter.

"It is illogical to bankrupt students for a debt they incurred studying for a better future," said Nandor.

"The government should be ashamed that students are being bankrupted by this scheme. Whether because of crippling repayments or because they choose to go down this path to escape debt repayment, it just shows how desperate things are for some graduates.

"For a government that is supposed to be student-friendly, this is unacceptable. When will they see the obvious, that the student loan scheme is damaging the future prospects of New Zealanders?"

The Green Party tertiary education policy is to phase out all student fees and ease the $5 billion student debt burden by applying a zero real interest rate to loans and introducing a debt write-off system for all students contributing to paid and unpaid work in New Zealand.

The Greens will also introduce a universal student allowance at the level of the unemployment benefit.

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