Hon Bill English National Party Education Spokesman
8 November 2005
Labour's loans will lead to lower standards
National's Education spokesman, Bill English, says Labour's student loan scheme will result in increased student debt
and lower quality education.
The legislation providing for interest-free loans was tabled in Parliament today.
Mr English says the policy encourages more students to borrow more money and pay it back more slowly.
"Currently just 55% of students eligible for a loan take one out. But now the more than 100,000 students who are
eligible for a loan but haven't yet taken one out have a strong incentive to take out a full student loan and put it in
the bank to earn a nice little nest egg on the taxpayer.
"Even if only half of those students take up the opportunity, the total student debt burden will grow by an additional
$2 billion over the next three years.
"Universities and polytechs are already pushing their fees up as they struggle to meet staff demands for competitive
pay. If these institutions can't pay market rates they will lose key staff and the quality of education offered will
"Families will also pay through lower quality education. The billions spent on the interest-free loan policy will draw
money away from polytechs, university staff and facilities. It does nothing to help the 20% of children who struggle
with basic reading and maths.
"Even an interest-free education is worthless if its quality is low," says Mr English.