Alliance Pleased With Holding Student Loan Interest Rates

The decision to continue to hold interest rates on student loans is a good example of the contribution the Alliance can make by being constructive and co-operative in the Coalition Government, Alliance leader and Deputy Prime Minister Jim Anderton says.

The government today announced that the ‘headline’ interest rate for the student loan scheme will be held at 7 percent for the third consecutive year.

"Under the previous National-led Government, student loan interest rates were set using a formula that guaranteed high interest rates.

“The Alliance has strongly advocated that the cost of education must not rise. There is no way the Alliance could agree to an increase in the cost of tertiary education.

“The cost of tertiary education is one of the biggest concerns to New Zealand families. The level of fees and student debt is a barrier to study and it holds back New Zealand’s economic development at a time when employers all over the country are complaining of a skills shortage.

“Holding the interest rate on loans will help to reduce the cost of education in real terms and it will mean students are able to pay off loans slightly faster,” Jim Anderton said.

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