Debt monster needs to be slayed

green-party

Wed Mar 28 2007 12:00:00 GMT+1200 (New Zealand Standard Time)

Debt monster needs to be slayed

Wednesday, 28 March 2007, 2:25 pm
Press Release: Green Party

28 March 2007

The Green Party fully supports the efforts today by students around the country opposing the now $9 billion student loan debt in an attempt to expose the ludicrous situation now faced by so many young people.

"The Government's changes to the debt scheme have been good but are simply fiddling at the margins of what is a massive fiscal monster. We cannot have a sustainable economy when young people enter into the workforce with a collective debt of $9 billion. The long term impacts are beginning to be felt, with many graduates unable to purchase a house till much later in their working careers. Many are even avoiding having families because they start their adult lives with such an enormous debt burden," Green Party Education Spokesperson Metiria Turei says.

"The system has retained its inequitable effect. Much of the support for Maori students entering into degree courses has been stripped away. So despite the no-interest policy, Maori students still take much longer to pay of their debts because of their participation in mostly sub-degree courses.

"The failure to enable better access to a living allowance for the majority of students means that much of the debt is for living costs. The small changes to the allowance scheme simply means that the overall cost of the scheme remains steady for the Government but that the number of students getting allowances is falling.

"Many families will now have the second generation acquiring a student loan debt, so the impact on families is huge. Parents are having to simultaneously recover from their own student debt and support their kids tertiary education because they are not eligible for a student allowance. A student allowance scheme that supports the majority of students is one effective means of cutting through the massive $9 billion debt.

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"Government funding of the tertiary sector is also extremely poor compared to similar jurisdictions overseas. Until the sector itself is better funded, Universities will continue to hike up student fees as far as possible, leading, in the end, to greater debt levels for students.

"Tweaking the system won't solve the problem. The student allowance scheme must be fixed properly to provide a living allowance to the majority of students. The repayment threshold must be significantly lifted and the sector must be properly funded so that fees can be capped at a much lower level than the current average of $4000 per year," Mrs Turei says.

ENDS

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