Hon Trevor Mallard
Minister of Education

15 September 2005 Media Statement

Loan policy billions more affordable than tax cuts

Labour's interest free student loan scheme is billions and billions of dollars more affordable than National's tax cuts, Education Minister Trevor Mallard said today.

"John Key is scatterbrained. Even if we were to believe his claims that Labour's policy is unaffordable, then his $7 billion tax cuts are certainly not affordable. And neither is the $11 billion in debt servicing that his tax cuts will require. National can't have it both ways.

"But since they are refusing to release their own costings and refusing to disclose where they intend cutting education and health services, I am not surprised, " Trevor Mallard said.

Trevor Mallard also corrected misinformation being peddled around about how the interest free student loans policy will work.

"Anyone - graduates included - who has a student loan from past, current or future study will pay no further interest under the new scheme – as long as they remain in New Zealand. Those who go overseas for fulltime study at postgraduate level will also be eligible.

"It is also blatantly incorrect to claim that students will be able to borrow limitless amounts of money upfront.

"This is not possible. When people borrow under the scheme their fees are paid directly to the institution where they are studying. The living costs part (up to a weekly amount of $150) is paid in weekly instalments, and only while you are studying. The living and course costs part of the loan are only available to full time students. "

Students past and present can see how much more quickly they will pay their loan off, and how much money they will save by clicking on the student loan calculator at www.labour.org.nz

ENDS

© Scoop Media