Lifting the student debt burden
Jim Anderton MP Thu Sep 9 1999
'By the time an Alliance Labour government can do anything about the appalling high fees and lack of student allowances, student debt will have reached $3,240 million,' Alliance Jim Anderton said.
'It is increasing at the rate of $46 million a month, $1.5 million a day, $1,050 a minute and $17.5 a second.
'More than 10,000 New Zealanders owe more than $35,000 in student debt.
'Under the Ministry of Education's own model it is projected that men would take an average of 15 years to repay their debt. Over that time they would have paid an average $8,300 in interest. Women would take 29 years and pay an average of $13,032 in interest.
'We are going to have to address what we do with that debt.
'The first step is to stop interest payments for both current and former students with loans debt. With interest payments between 7 and 8% the government is milking students for all they can get. In the UK and Australia their loans schemes at least have an interest rate at the rate of inflation and no more.
'The second step is to have an in-depth inquiry into what to do with the outstanding debt. There is no doubt that student debt is an unfair millstone around the neck of hundreds of thousands of current and former tertiary students.
'It is having and will have an extremely serious affect on their future wellbeing. It is an extraordinary incentive for many of our best and brightest students to leave their own country permanently.
'There have been many suggestions to deal with debt, such as wiping it entirely, encouraging additional repayments on a subsidised basis, lowering the 10c to 15c in the dollar repayments and raising the threshold at which students start paying back their loan.
'These all have to be looked at by an independent enquiry in an open and democratic way so that we do not create further injustices,' Jim Anderton said.
The Alliance will be announcing what it will do with student fees and allowances for future students at a separate time.