Debt stopping graduates buying homes

Green Tertiary Education Spokesperson Nandor Tanczos today said new research showing that banks are rejecting mortgage applications based on the size of student loans showed that the student loan scheme was continuing to seriously disadvantage graduates.

The research released today by the New Zealand University Students' Association showed that some banks are rejecting applications for finance based on a graduates' student loan, despite both Government and the Banking Ombudsman saying this should not be a consideration.

"We are now into the second term of a Labour led Government and still the effects of the student loan scheme are punishing graduates and harming our social fabric," said Nandor.

Over half of respondent bank managers and loan officers have cited student loans as a factor in declining finance and Nandor agreed with NZUSA that mortgage applicants should disclose that they have a student loan but should refuse to disclose the amount.

"Banks are ignoring the clear guidance of the Government and Banking Ombudsman and are discriminating against people on the basis of their student loans. I want to know what action the Government is going to take, and when, to stop this happening," said Nandor.

"This research underpins why the student loans scheme should be scrapped as soon as possible. Right now we are loading up our young graduates with huge levels of debt which is stopping people from buying houses, obtaining credit and starting families.

"Why wouldn't young people choose to go overseas when debt is stopping them from building a life here?" asked Nandor.

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