Student Loan Scheme Amendment Bill (No 2) [Second reading]

Hone Harawira; Finance Spokesperson for the Maori Party

Tuesday 20 March 2007

PHILOSOPHY

Mr Speaker, when we were on the road during the election campaign, an old pakeha guy sat me down to talk about the cost of education, and what he said has stuck in my mind, and I’d love to share his thoughts with the House. He said:

“If education is essentially the passing on of knowledge from one generation to another, then who are we to charge our children, for something that we got for free.”

That’s the thinking that guides me in this and every debate on education, because the Maori Party believes that if we’re stupid enough to charge our kids to get a tertiary education, then we shouldn’t be surprised when they all fly overseas as soon as the ink dries on their degrees.

DEBT

And just what does this student debt add up to?

Well, take a seat folks, pat yourselves on the back and shake your head at the foolishness of it all, because we have mortgaged the future of our nation to the tune of nine billion dollars – because that’s the level of student loan debt in this country. And hell, for once Māori are right up there, with our own student debt level at 1.5 billion dollars.

Now that’s a heck of a lot of money in any man’s calculations. Certainly it’s right up there for Maori anyway – more in fact than government had set aside to settle 150 years of lands stolen, confiscated and just plain ripped off from Maori.

But still, for all that, I can’t help thinking that the debate is all a bit skewed – because it should be more than just a discussion about money owed.

The debate should also be about the return generated by our young people’s academic endeavour, the commitment, the time, the energy and the sacrifice, and the benefits which accrue from our young people being more educated, more creative and more productive.

But it ain’t. Instead it’s about paying back loans, interest rates, penalty clauses, repayment obligations, repayment holidays, and how to keep paying it back even when you’re overseas!!!

DEBT REPAYMENT

So we checked around some of the whanau to see what was happening.

My own daughter is in her third year at law school, racking up $10,000 a year in student debt, and my advice to her is get her degree, then jump a plane, fly away overseas and forget about her debt for a few years. Go and enjoy the world, have a life, and, fingers crossed, come back when she’s good and ready, and worry about debt repayment then.

For heavens sake, it’s tough enough just getting by these days without having to spend all your life at school, flog yourself to death getting a degree, and then have to start paying off a debt the size of a house mortgage before you can even afford a house.

Another one had qualified with a prestigious environmental land management degree, but in the process had racked up a nama of more than $35,000, applied for 59 jobs without success right out of uni; and ended up waitressing in a pub. So for a laugh she applied for a job to teach English in Japan – and hello – job application number 60 was successful.

That was OK for a while, then she wanted to come home, but the salary was a pittance compared to Japan, and to get a decent wage would mean having to go back to Teachers College, rack up another student loan and even more debt.

So what would this Bill have done for her? Well it meant that:

she could keep working in Japan and still pay off her debt,

or she could study in Japan and not pay interest on her loan,

or she could even enrol with a tertiary institution here, do her studies in Japan, and get another student loan to go with her other one !!

But here’s the thing - debt repayment policies won’t stop the brain drain. Increasing student fees and costs, and the lack of access to decent student allowances means student debt continues to rise, and student flight along with it.

MAORI

And at another level, the Waitangi Tribunal Claim, WAI 910, lodged by Te Mana Akonga, states that the Student Loan Scheme breaches the Treaty of Waitangi in that it unfairly discriminates against Maori, and notes that:

Maori have to borrow more from the Student Loan Scheme than non-Maori.

Maori have more student loan debt over $20,000 than non-Maori.

Maori have greater difficulty repaying student loan debt than non-Maori.

So we have the old catch 22 - because of the failure of secondary schools, Maori students are more likely to study at certificate and diploma levels, they move into lower paying jobs, and consequently they take longer to repay loan debt, than do their non-Maori counterparts.

The only time things seem to even out is when you compare Maori and non-Maori degree level graduates – but the irony of that of course, is that those degree courses are the most expensive.

CONCLUSIONS

Mr Speaker, the Maori Party supports any move to reduce student debt, and we support the notion of a repayment holiday, although we would make it five years rather than the recommended three.

But I go back to our fundamental concern that we are driving our graduates into crippling debt before they even start work.

Education is a nation’s investment in its own future, and we need to be visionary in how we approach student costs and student learning.

The Maori Party sees Matauranga Maori, as a treasure whose protection is guaranteed under Te Tiriti o Waitangi.

We also see a decent education as being a treasure that we should guarantee to all our youth, and accordingly we support a greater investment in tertiary education to help reduce student costs.

And we also support the submission from the National Council of Women who said that while some people claim education is primarily a private good, and so students should pay for it, they believed that keeping and attracting students is actually in the public interest – and that it makes good sense to reduce student debt in exchange for student commitment to society at large – that if tertiary study was seen as a public good, we wouldn’t see the numbers of graduates driven overseas that we have.

Mr Speaker, as recently as 1989 student fees were $129. In 1990 the Labour Government introduced a flat fee of ten times that amount, then National got in, and changed the Act so that institutions could set their own fees – and since then fees have increased, so that now, in 2007, the average fees are $5000 – a shameful legacy that both Labour and National have created, of which the Prime Minister herself said back in 1999, “tertiary fee rises are crippling our future”.

Last year’s annual report of the Student Loan Scheme talked about ensuring the student support system promoted equity and fairness; was consistent with the wider income support systems, and made tertiary education affordable for all.

If that means my daughter with her $40,000 debt; the young woman with a $35,000 debt who took 59 job rejections before taking a job in Japan; and the thousands of other Kiwis who have had to borrow under the scheme, won’t have to be burdened with massive debt at a time in their lives when they should be preparing for their own future, and our nation’s future, then all good.

If not, then excuse the Māori Party for continuing to fight for a future that includes our own kids running our own country, rather than immigrants brought in to cover for gaps that we have so foolishly created.

ends

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