Hon Pete Hodgson
Minister for Tertiary Education

3 October 2008
Embargoed till 12.15pm Media Release

Student loan pay back time halved

The time taken for student loans to be repaid has halved from eight years to four years, according to recent Ministry of Education advice.

The advice given to the Tertiary Education Minister Pete Hodgson is that the median repayment time for those who finished study in 1999 and remained in New Zealand was eight years but that had fallen to four years for 2005 leavers.

The government’s interest free student loan policy was introduced in April 2006.

Pete Hodgson welcomed the findings saying that the report was a vindication of the government’s decision to proceed with the interest free student loan policy for people who stay in New Zealand after graduation.

“Let’s recall that this policy was met with derision at the time,” Pete Hodgson said.
“National leader John Key said he would oppose it with every bone in his body.”

“Student debt has been a significant social issue ever since the early nineties. Back then National promised to scrap the then Labour government’s fee of $1250 per annum. Instead they more than doubled the fees, which then climbed strongly right through the decade.

“This government has controlled fees, removed interest on loans and made student allowances more readily available. The combined influence of these measures, especially the interest-free policy, is now having its desired effect.

“In our next term Labour wishes to make progress on moving towards, but not directly to, a universal student allowance. “

ENDS

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