18 Feb 2000

Interest rate freeze good news for students

The announcement that the student loan interest rate will be frozen at 7.0% for the coming financial year is a positive sign for students, Green Party tertiary education spokesperson Michael Tritt said today.

Steve Maharey, the minister for tertiary education announced this morning that the interest rate would have risen to 7.6% using the present formula, but will be frozen while the government conducts a review of the interest rate setting methodology.

"This is good news because students will be paying less interest than they would have under the forumula used by the previous National government," Mr Tritt said.

"It is also good news because the minister has indicated that he perceives a problem with the way that interest rates are set." Mr Tritt however believes that the frozen rate of 7.0% is still excessively high.

"I am pleased that Mr Maharey is implementing a review of this iniquitous system, but the outcome must be more than just tinkering with the interest rate," Mr Tritt said

"No-one should pay more than the rate of inflation on a student loan, and I hope that the minister gives serious consideration to implementing this." Mr Tritt also urged the government to address the underlying causes of student debt, rather than the interest rate alone.

"Attention must be given to cutting fees and the implementation of a universal student allowance, only then will we begin to contain the debt problem," Mr Tritt concluded.

Contact Michael Tritt on (021) 2511732

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