More Debt Under Alliance Student Loan Scheme
The Alliance policy on the student loan scheme will see more students in debt, Minister for Tertiary Education Max Bradford said today.
“Mr Anderton has been moaning about the level of student debt for a long time and yet now he wants to see it escalate out of control by charging no interest,” Mr Bradford said.
“No interest on loans will encourage more students to borrow.
"For a start the 40,000-odd students who currently don’t use a student loan will probably take the opportunity to borrow, if only to pocket the interest. If they each borrowed $6,000 the taxpayer would have to find another $240 million.
“This is as much as we are investing in the new Auckland hospital," Mr Bradford said.
“This blank cheque access to taxpayers’ money will be totally unacceptable to the average New Zealander.
“Mr Anderton will have to find some other way to slow down the amount students borrow, just like the UK and Australia have,” Mr Bradford said.
“The UK and Australia, which both have interest rates at the rate of inflation, have had to introduce other rules to limit borrowing.
“The UK limits borrowing to living expenses and means-tests them. Australia limits borrowing for fees, but fees cost a third more for loan borrowers. These methods could limit access to tertiary education for some people.
“The current scheme is less meddlesome, fairer and encourages all New Zealanders to take on tertiary study,” Mr Bradford said.
“How Mr Anderton thinks he can pay for this proposal is beyond me.
“Even if there is no additional borrowing, the Alliance’s proposal would cost $122 million next year alone at present levels.
“Once again the Alliance wants to unfairly dump huge costs onto families who will end up paying for others to earn more,” Mr Bradford said.