Debt milestone highlights economic millstone
9 April 2008
Student debt milestone highlights economic millstone
Student debt levels are predicted to reach $10 billion tomorrow, creating unacceptable barriers to tertiary education, says Green Party Education Spokesperson Metiria Turei.
"Our long term economic future is being threatened by this dire situation. The mushrooming student debt milestone represents an economic millstone for New Zealand," Mrs Turei says.
"This $10 billion of debt is outrageous. The student debt crisis poses a long-term financial threat, while keeping a generation of Kiwis out of the housing market."
Growing indebtedness affects all students, but particularly those from lower socio economic groups, who are discouraged from taking out loans to study.
A recent New Zealand University Student Association (NZUSA) survey shows that students whose parents and guardians had no secondary school education were significantly more likely to be from a low socio-economic group, with parental income under $20,000, Maori, aged 26 years or more, and from Manukau Institute of Technology, Waiariki Polytechnic or Whitireia Polytechnic.
There is a significant reduction of university enrolments from students from poorer backgrounds, down from 15 percent in 2004 to 6 percent in 2007.
"Debt concerns are restricting access to higher education, as many students opt for vocationally-orientated courses at certificate or diploma level, rather than academic degrees," Mrs Turei says.
And although the student population is increasing, fewer are getting a full allowance due to strict means testing.
Students are borrowing money - taking out bank loans and using overdrafts and credit cards - just to survive. And many debt-laden graduates choose to chase lucrative overseas job offers, rather than staying to contribute to the local economy.
"It's a ghettoisation of Maori, women and lower socio-economic groups into the cheaper, lower level courses and another form of negative social engineering. New Zealand's long term economic stability is being threatened by this debt crisis and the only solution to ensure access to education is a universal student allowance."