25 February 2000
GOVERNMENT AND OPPOSITION MISS THE POINT ON STUDENT LOANS
Both Labour and National make valid points about the student loan scheme but both also miss the point says United New
Zealand leader, Hon Peter Dunne.
The National Opposition are claiming that Labour's election policy of not charging interest on student loans will
encourage students to borrow more, while the Labour Government welcomes the increase in loans being taken up as a sign
of increased participation in tertiary education.
Mr Dunne says both National and Labour are making worthwhile claims. "While more students may go into debt their cost of
servicing that debt will be much lower.
"More importantly interest free loans while studying should encourage more students to take up the option of tertiary
study and perhaps encourage them to stay in New Zealand after their studies, because of lower repayment levels. This is
surely a desirable outcome for the students and the country in trying to build our knowledge economy," says Mr Dunne
He says what is actually needed is adoption of United New Zealand's three point funding approach to tertiary education.
Both National and Labour while making some important debating points, miss the essential issue which is the need for an
integrated approach to tertary funding.
The policy calls for:
limiting student interest on loan repayments to movements in the CPI (Consumers Price Index)
increasing core funding for tertiary institutions to 80 per cent of course costs
abolishing parental income testing of student allowances for students over 20 years.
"By implementing United's integrated approach course costs will be lower and student allowances will be more freely
available, thereby reducing the demand for student loans and student debt levels. Furthermore if student loans are made
available for legitimate costs with low interest repayments then individual students will have less debt and more people
will be encouraged to embark upon and extend their tertiary study.
"The Government's move in reducing fees for dentistry students deserves to be welcomed. Their planned review of tertiary
funding needs to implement a formula to reduce course costs so institutions can set lower fees and thereby reduce the
need for high levels of student debt.
"United's three pronged plan aims to achieve this," concludes Mr Dunne.
END
New Zealand's Liberal Party
MEDIA STATEMENT
HON PETER DUNNE, MP
LEADER UNITED NEW ZEALAND
Parliament Buildings, Wellington 6001.
(04)471 9410 or (025) 469 808. Fax (04)499 7266.
e-mail: peter.dunne@parliament.govt.nz. Internet Address: http://www.united.org.nz
New Zealand's Liberal Party