Loans scheme favours the few

“20% of student borrowers get 75% of the benefit from Labour’s irresponsible election-year interest free loans bribe,” according to figures released by National Party Education spokesman Bill English.

Mr English says based on Labour’s calculator, the numbers show that it’s expected taxpayers will meet an interest bill of more than $5.5 billion for existing student debt. This is based on conservative assumptions.

“A small number of students with large debts get the lion’s share of the gain.

“80% of borrowers owe less than $25,000. Their total interest bill for their debt is about $1.4 billion.

“The remaining 20% of borrowers owe more than $20,000. Their interest bill is about $4.3 billion.

“A borrower with a $12,500 loan will save $4,600 interest, while someone with a $52,500 loan will save $79,734 interest. That is 17 times as much.

“Taxpayers without student loans will paying for this irresponsible policy which provides an incentive for students to borrow more,” says Mr English.

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