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Students should not have to borrow to live

Wednesday, 28 April 2004

Dunne: Students should not have to borrow to live

The news that student debt has soared to $7 billion today is a landmark that no government should be proud of, according to United Future leader Peter Dunne

“Students shouldn’t have to borrow to live. We don’t ask this of our sick, aged, or unemployed, yet somehow it is acceptable to do this to the best and brightest of our youth.”

Mr Dunne said one way to bring down the spiralling costs of student loans is to make the student allowance system fairer.

“Students under 25 are assessed for allowances based on their combined parental income, so that those whose parents earn less than $28,079 get a full allowance, and those whose parents earn more than $50,751 get nothing.

“These income thresholds haven’t changed since 1992, and it would be hard to claim that a combined parental income of more than $50,000 is wealthy by today’s standards. These thresholds must change to reflect the reality of incomes in 2004.

“Another inequity is the fact that whereas students under 25 are assessed for allowances based on their parents’ income, the same rules do not apply to those aged under 25 on the dole who might be just as reliant on parental support yet, in comparison, are getting money for doing nothing.

“What kind of messages do such inequities send to our young people about the value society places on their desire to seek a better future for themselves through higher education?

“By not addressing these issues surrounding student allowances, we are pushing young people further into the loan scheme.

“The legacy of debt that they carry with them in the following years will affect their decisions about staying in New Zealand, buying a home, or starting a family, at a time when higher salaries beckon overseas, house prices have become unaffordable, and couples are increasingly delaying childbirth.”

Mr Dunne said United Future would introduce bonding schemes for graduates in fields facing skills shortages (e.g. health), whereby loan debt would be written-off in return for work in New Zealand after graduation.

“And to remove impediments to decisions about when or whether to start a family, United Future would freeze student loan interest and write-off a portion of caregivers’ debt for two years when they have a child.”


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