FOR IMMEDIATE RELEASE
Student debt delays kids – new report
11 August 2015
The national student union says crushing student debt is forcing some graduates to postpone starting families.
NZUSA’s Tertiary Student Income and Expenditure Survey, had which responses from 5,000 current students across the
country, found that 36% of students believe their loan will affect their decision to have children and a fifth will wait
longer to start a family than if they were debt-free.
NZUSA President Rory McCourt says user pays education is having unintended consequences on New Zealand society.
“What this research shows is that toxic student debt is removing choices for New Zealand families. They’re delaying,
deferring and deserting starting a family because of mounting debt.”
The survey revealed that just over a fifth of respondents (21%) won’t have children until they’re debt-free, while
another 20% admit that their loan means waiting longer than they’d like to have kids.
One student commented “I won’t have children because I wouldn’t be able to provide for them as long as I’ve got this
debt.” Another student remarked that they would like to have the choice.
Some students said that the debt meant delaying home ownership, which was seen as essential for starting a family.
Others were more sombre about the impact of debt: “If you waited until you were financially stable you would be too old
to have children. That’s the reality of study today.”
One student said she was worried about the risk of having children later, saying “By the time I pay off my debt I’ll be
in my thirties and the risk for birth defects becomes much higher. I don’t know if I can do that.”
Others said wouldn’t affect their decision to have children, but will definitely make raising them harder.
Mr McCourt says the excessive 12 cent repayment rate, which applies to every dollar earned above $19,084, was punishing
for graduates and forced them to make decisions like delaying starting a family.
“Our repayment threshold was originally set to ensure the poorest New Zealanders didn’t have impossible repayment
obligations. By not adjusting it we’ve increased the effective marginal tax rate for minimum wage workers to above that
of the Vice-Chancellor and the Prime Minister. That is deeply wrong.”
The union says an Australian-style progressive repayment scheme was needed to ensure those who could afford to pay their
loans off at a fair rate.
“In Australia graduates don’t pay a cent until they earn $54,126, and even then it’s only 4 per cent of their income.
From there it goes up 0.5 per cent for every additional $6,000 earned. The top rate of 8 per cent doesn’t apply until a
graduate is earning over $100,520.”
Findings from the Tertiary Student Income and Expenditure Survey:
36% of students believe their loan will affect their decision to have children
21% won’t have children until they’re debt-free
20.52% will wait longer than they if they were debt-free
20% will wait for longer than they’d like, to have kids