Will students also have to repay loans faster?

new-zealand-labour-party

Tue Feb 24 2009 13:00:00 GMT+1300 (New Zealand Daylight Time)

Will students also have to repay loans faster?

Tuesday, 24 February 2009, 4:50 pm
Press Release: New Zealand Labour Party

Will students also have to repay loans faster?

The Government’s decision to introduce a student bonding scheme raises questions about whether it will also adopt proposals to make students repay their loans faster, says Tertiary Education spokeswoman Maryan Street.

“The Government this week announced a Voluntary Bonding Scheme, offering some students financial incentives to reduce their student loan repayments in exchange for working in hard-to-staff areas.

“Proposals for the bonding plan were included in Treasury’s Briefing to the Incoming Minister.

“While the bonding plan is voluntary, other much more worrying proposals around fast-tracking student loan repayments were included in the same piece of Treasury advice and the Government needs to say whether it is also considering adopting these measures,” Maryan Street says.

“Treasury officials proposed in the briefing that the Government should fast-track loan repayments by increasing compulsory repayments above the current 10 per cent for what it called “those on higher incomes”.

“The officials advocated compulsory repayments be increased to 12 per cent for those earning over $40,000, and to 15 per cent for those earning over $60,000.

“Treasury also proposed: lowering the existing repayment threshold, requiring students to pass a certain number of courses in order to get loans and allowances, and limiting the number of years students can borrow loans for.

“These would not be wise steps at any time and especially in the current economic climate. The last thing we need to inflict on former, current and prospective students right now is additional financial stress.

“At a time when the Government is stressing the need for increased investment in skills to ensure the smartest possible passage out of the recession, such policies would simply be foolhardy,” Maryan Street said.

“The Government needs to give an assurance that these draconian Treasury proposals are not on the agenda.”

ENDS

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