Interest on student loans on the table for National

The prospect of the National Government putting interest back on student loans is still on the table with Budget papers revealing that they got advice from officials about introducing a 2% interest rate, says Labour’s Tertiary Education, Skills and Training Spokesperson Grant Robertson.

“Treasury produced a paper earlier this year that models the impact of putting interest back on student loans.  The question for the Government to answer is why did they produce such a paper? It seems unlikely that Treasury would do this work if they had not been asked to by the Government.

“John Key and Steven Joyce have said in the past that they did not support the student loan policy and that it only made sense for political reasons.  It seems the Government is still has the idea of putting interest back on loans on the table. Students and their families have every reason to be concerned about this.”

Other Budget documents released today show that the Treasury had concerns about a number of parts of the tertiary education changes, including increasing the student loan repayment rate from 10 to 12%, said Grant Robertson.

“Officials told the Government that the policy should at least be delayed because they did not think enough work had been done on the impact of the changes on graduates or whether it targeted the right people. 

“They commented that ‘over the forecast period, this will extract over $400 million of value from largely young, newly qualified workers, and is likely to have an impact on behaviour that has not yet been fully analysed’.

“But the Government ignored this advice and pressed ahead with a policy along with other changes that show they continue to see tertiary education as a cost to be cut rather than an investment in our future economic and social well-being,” said Grant Robertson.