4. MOANA MACKEY (Labour) Link to this
to the Minister for Tertiary Education
What reports, if any, has he received on trends in student loan borrowing over the past year?
Hon Dr MICHAEL CULLEN (Minister for Tertiary Education) Link to this
The annual report shows that student loan borrowing has tended to reduce over the past 4 years. The average time to repay a student loan has dropped from around 10 years 4 years ago to around 9 years today, and that trend has continued over the last year.
Hon Dr MICHAEL CULLEN Link to this
I have seen a number of reports suggesting that borrowing will skyrocket and blow out following the introduction of interest-free loans. They were from Mr Key and from Mr English. In fact, the predictions of the outstanding loan balance for 2009-10—in some 3 years’ time—that were made this June were only 1 percent higher than those made in June last year, before the announcement of the interest-free student loan policy. The increase in cost is about 10 percent of the estimates made by National Party supporters before the last election.
Hon Bill EnglishCan the Minister explain the forecast on page 41 of the annual report that shows that borrowings will go up—in the officials’ forecast—by at least 16 percent?
Hon Dr MICHAEL CULLEN Link to this
There has been some increase in borrowings, and that is related in part to student numbers. If the member cares to look at it, he will find that the increase is a tiny fraction of that forecast by himself and National Party supporters outside the House before the last election, with figures of up to $1 billion being used at that time.