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Education = debt for life under National

Chris Hipkins
MP for Rimutaka
Education (incl Tertiary and ECE)

24 January 2017

Education = debt for life under National

Latest statistics show that student loan debt continues to balloon while participation in tertiary education falls under the current National government, Labour’s Education spokesperson Chris Hipkins says.

“Participation in tertiary education peaked in 2009/10 and has been steadily declining ever since as the effects of a National Government bed in.

“Meanwhile the accumulated debt of those who do complete tertiary study has been climbing steadily, increasing a whopping 37 per cent under National compared to just 9 per cent under the previous Labour Government. In fact towards the end of the last Labour government’s term median loan balances for those leaving tertiary study were actually declining.

“The time it takes to repay student loan debt continues to increase and record amounts are being written off through bankruptcy.

“National are saddling future generations with huge debt and it’s getting worse not better. I’m not surprised they tried to sneak these figures out just before Christmas hoping nobody would notice.

“Declining participation rates are really concerning. If we are to provide all New Zealanders with the opportunity to adapt to the changing needs of the economy and society, and to fulfil their own potential, we need to see participation in tertiary education increasing, not decreasing.

“Labour will tackle declining participation and ballooning student loan debt by introducing three years of free post-school study for all New Zealanders. It’s a positive step towards our goal of freely available, life-long learning opportunities for all Kiwis,” Chris Hipkins says.

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Contact: Chris Hipkins 021 707 927

A copy of the Student Loan Scheme Annual Report can be found here: https://www.educationcounts.govt.nz/publications/80898/student-loan-scheme-annual-report-2016

Some concerning trends (taken from the data tables):

1. Participation continues a steep decline under National:

YearStudentsEquivalent full-time students (EFTS)Participation rate
1994 245,980 140,0108.3%
1995 259,270 145,4609.1%
1996 260,605 148,5009.0%
1997 258,930 154,8358.8%
1998 259,275 160,2658.9%
1999 294,415 181,09510.0%
2000 314,660 190,67010.6%
2001 342,425 203,76511.4%
2002 381,105 224,70512.5%
2003 407,405 239,42013.1%
2004 432,775 243,09013.6%
2005 452,415 242,78014.0%
2006 445,515 235,40513.6%
2007 441,750 237,43013.3%
2008 418,655 235,07512.5%
2009 423,000 250,60012.5%
2010 418,135 254,47512.2%
2011 381,425 245,56011.0%
2012 372,730 245,66010.7%
2013 368,665 244,74010.5%
2014 363,080 239,69510.2%
2015 358,305 233,5909.8%

(Source: SLS 1 – Student Loan Scheme 2016 web tables 141216)

2. The median loan balance on leaving study continues to increase. Under Labour, between 2002 and 2008, the median loan balance increased by 9%, under National it has increased 37%.

Year of last studyMedian loan balanceInflation adjusted Median loan balance
2000$ 8,360 $ 8,360
2001$ 8,470 $ 8,256
2002$ 8,700 $ 8,272
2003$ 9,410 $ 8,811
2004$ 9,490 $ 8,645
2005$ 10,330 $ 9,109
2006$ 10,210 $ 8,780
2007$ 10,620 $ 8,835
2008$ 11,170 $ 9,025% increase 02-08:9%
2009$ 11,680 $ 9,248
2010$ 12,310 $ 9,330
2011$ 13,570 $ 10,126
2012$ 14,670 $ 10,853
2013$ 15,990 $ 11,651
2014$ 17,000 $ 12,356% increase 08-14:37%

(Source: SLS 9 – Student Loan Scheme 2016 web tables 141216)

3. The amount being written off due to bankruptcy continues to increase:

Write-offs2013/142014/152015/16
$ million

Bankrupt

15.016.017.6
Deceased9.418.914.7
Number of cases
Bankrupt685544483
Deceased7201,225973

(Source: SLS 30 – Student Loan Scheme 2016 web tables 141216)

4. The average loan balance at 30 June is now almost $21,000:

Average and median loan balances at 30 June
YearAverage ($)Median ($)
2005$14,997$10,404
2006$15,883$10,652
2007$16,833$11,087
2008$16,129$10,883
2009$16,213$11,090
2010$16,728$11,399
2011$17,302$11,880
2012$18,507

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