No Future In Return To The ‘90s
OPSA today welcomes John Key’s reaffirmation of National’s commitment to interest-free graduate debt, but is concerned
that some people are suggesting a return to interest. This is in response to Mr Key’s recent comments that graduate debt
will remain interest-free, “But economically, it doesn't really stack up.”
Interest on graduate debt was highly unfair; it meant that a lower-income graduate could end up paying more in total for their education than a higher-income graduate, who could pay off their debt more quickly.
For example, “Many nursing graduates would have ended up paying more for their 3 years at polytechnic than most doctors
would have paid for 5 years at medical school. That’s clearly unfair and stupid” said OPSA president, Meegan Cloughley.
The cost of interest also created a barrier that prevented some of our best people from entering or furthering their
education.
“This could mean that your health professional was the person best able to re-pay high debt, rather than the person best
able to do the job” said Ms Cloughley.
Further, the cost of interest also contributed to New Zealand’s brain-drain. It contributed to the shortage of
trades-people. And for some in-demand professions saw the increased costs simply passed on to public. Interest-free was
a reversal of one of the most unpopular education reforms of the 1990s.
“While various players on the side-line may be egging National on to re-introduce interest, National likely knows it
would be very unpopular with graduates and the public. No graduate wants to pay extra and no parents or grandparents
want to saddle their children with spiralling debt” said Ms Cloughley.
“The country doesn’t want this barrier to education, John Key’s job is to make such wishes of the country stack up
economically.” concluded Ms Cloughley.
ENDS