8. GRANT ROBERTSON (Labour—Wellington Central) Link to this
to the Prime Minister
Does he stand by his statement about the student loan scheme that “economically, it doesn’t really stack up”; if so, what, if anything, is he going to do to make the scheme “stack up”?
Hon JOHN KEY (Prime Minister) Link to this
Yes. Yesterday I was referring to the fact that the Government’s student loan book is now $11 billion, but for every dollar we lend we collect just 53c back. In the Budget the Minister for Tertiary Education, Steven Joyce, announced changes to the system to make it fairer for both the taxpayers who fund it and the students who access it. The changes included requiring students to pass 50 percent or more of their full-time courses over 2 years to be able to keep borrowing, a lifetime limit on access to student loans, preventing permanent residents and Australians from accessing a student loan until they have lived in this country for at least 2 years, and increasing the StudyLink student loan administration fee. To help students get out of debt sooner we have introduced an early repayment bonus, and we have a highly successful voluntary bonding scheme available for doctors, nurses, midwives, veterinarians, and, of course, teachers.
When he told Victoria University students yesterday that “there has to be a better way of doing it” in relation to interest-free student loans, what better way did he have in mind?
Firstly, all the initiatives that were announced in the Budget; and, secondly, the Minister for Tertiary Education is looking at ways to improve collection of loans from overseas-based borrowers.
Does he stand by his statement in this House that interest-free student loans were an unaffordable and irresponsible cost to this country; if so, will his Government be reintroducing interest on student loans?
No, to the latter, and yes to the former, and the reason is that it is factually correct. When Labour was in Government it had the audacity to go out and tell the New Zealand public it would cost $100 million in the first year for interest-free student loans, rising to a total of $300 million a year. I am advised that the current cost is $408 million and potentially rising.