Delayed public outrage would result if Labour's interest-free student loans was ever put in place, Acting Minister of Tertiary Education David Carter predicted today.

"The public has in the past voiced outrage over a less restrictive student loans scheme, that allowed young people to borrow for overseas trips.

"There were calls for a clamp-down. National acted by tightening up the scheme," Mr Carter said.

"Labour is now threatening to reignite that anger by enticing students into unnecessary debt through interest free loans.

"The reaction could be expected to be delayed because the first response is the predictable joy of students having a chance to access interest free money," Mr Carter said.

"However longer term, the costs of such a scheme would come home to haunt borrowers and taxpayers.

"Under Labour's policies we could expect those current students who don't have a loan to go into debt. Less than half of current tertiary students have a student loan," Mr Carter said.

"Labour's argument that it would limit what students spent loan money on was naive and reveals a complete lack of understanding of normal business skills," Mr Carter said.

"Any enterprising student will see they will be better off if they invest their own money, they have saved for their education, and off-set these investments with the interest-free taxpayer's money that Labour is promising.

"This is unfair to ordinary New Zealanders who are working hard to pay off their mortgages. They do not have access to interest-free money to live on," Mr Carter said.

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