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Student Loans—Interest-free Policy

Wednesday 13 June 2007 Hansard source (external site)

Mackey4. MOANA MACKEY (Labour) Link to this
to the Minister for Tertiary Education

What reports, if any, has he received on support for the interest-free student loan scheme?

CullenHon Dr MICHAEL CULLEN (Minister for Tertiary Education) Link to this

I received a report that states: “There are half a million New Zealanders who’ve now got used to not paying interest and we have to listen to that pretty carefully.” and: “… you’ve got half a million New Zealanders now with zero percent loans and that’s a pretty hard thing to turn around and say it’s over.” That is Mr Key’s answer to the question: “If elected Government, would National keep the student loan interest write-off scheme?”. It sounds like a tentative “Yes”.

MackeyMoana Mackey Link to this

What reports has he received indicating concerns about the student loan scheme?

CullenHon Dr MICHAEL CULLEN Link to this

I have received a number of written questions expressing concerns that “… interest free student loans are directing saving resources away from other priorities … while at the same time creating no obvious educational benefits.” and “What is fair about taxing people without tertiary education in order to pay for an interest free student loan scheme?”. Those questions came from the Opposition spokesperson on tertiary education, Dr Paul Hutchison. Those statements sound like a definite “No” to the question that Mr Key was asked.

MackeyMoana Mackey Link to this

What are the benefits of the interest-free student loan policy?

CullenHon Dr MICHAEL CULLEN Link to this

The student loan interest-free policy “cuts the cost to students of tertiary study and encourages skilled New Zealanders to stay in New Zealand.” It should be noted that Mr Key campaigned against it and voted against it.

TurnerJudy Turner Link to this

Does the Minister consider it reasonable that the number of students who must borrow living costs is almost the same as the number of students eligible for the student allowance; if so, why?

CullenHon Dr MICHAEL CULLEN Link to this

Ever since the modern form of student allowances was introduced—many years ago now—the allowances have been income-tested on parental income. Even now, despite the large number of people who go into tertiary education, there is still some bias towards people from higher-income groups compared with those from lower-income groups. I would not consider it unreasonable that those on higher incomes made some contribution to the cost of their young person’s education.

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