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Noam Chomsky on Student debt

Written By: - Date published: 2:00 pm, October 10th, 2014 - 61 comments
Categories: class war, education - Tags:

Noam Chomsky

61 comments on “Noam Chomsky on Student debt”

  1. Lanthanide 1

    It’s true, but I’d like to see what other system he proposes to distribute scarce resources in a fair manner without waste.

    As it is our student loan scheme is fuelling far too many diploma mills teaching courses of dubious value to students who should be doing something else.

    • minarch 1.1

      +1 to this

      there are some pretty sketchy course out there (particularly for early school leavers ) that seem to be a rort to hoover up less astute peoples loan entitlements

      the “retail” course are the worst, you can end up in SERIOUS debt learning the arcane arts of working in shop !

    • One Anonymous Bloke 1.2

      Are there any other education models overseas that we could perhaps emulate?

      • minarch 1.2.1

        Uruguay provides free education through to post grad level and a free laptop for every child in primary education and is rolling out the same for ALL students currently

        Population of about 4 million, ——NZ about 4.5 million

        GDP 59.201 billion , ——– NZ 181.3 billion

        Per capita $17,121 , ——— NZ Per capita $40,481

        hmmmm

        • One Anonymous Bloke 1.2.1.1

          Per capita $17,121 , ——— NZ Per capita $40,481.

          Woo hoo, in your face Uruguay! Go All Blacks! No, wait…

        • Lanthanide 1.2.1.2

          I would say given their current level of development, that such a policy for Uruguay is sensible – education will be a primary way to lift the productivity of their country. NZ isn’t in the same position.

          Also comparing total country population isn’t as important as comparing the number of students taking up these offers, or the types of education being offered, and if you want to get really detailed, the quality of the education (best measured by international ratings of universities and/or achievements of university professors).

          • Tracey 1.2.1.2.1

            how is the quality of education measured by an international ranking based in no small part on research output?

            getting back to full employment would see a drop in tertiary numbers.

          • minarch 1.2.1.2.2

            what do you consider Uruguays current level of development Lanth

            I own a small property there, have spent a lot time there both rural and urban and consider it many ways more developed than NZ ( in the areas in i consider important to be fair)

          • Draco T Bastard 1.2.1.2.3

            I would say given their current level of development, that such a policy for Uruguay is sensible – education will be a primary way to lift the productivity of their country. NZ isn’t in the same position.

            Actually, NZ is in the same position. Due to not doing the investment to develop our economy needed over the last thirty years and giving that money to the rich instead we have increasing poverty and and an economy overly dependent upon a single sector.

            Then we throw in the fact that the low hanging fruit in science and development has gone we actually need more students to work cooperatively to push ever more innovation.

          • Paul 1.2.1.2.4

            How does your argument deal with the fact that Germany does not charge for tertiary education?

        • Murray Rawshark 1.2.1.3

          Brazil does as well, and pays generous university scholarships. The only problem there is that the public schools, which the poor go to, are so bad that the privately schooled rich are far more likely to pass the tertiary entry exams. Hence most of the tertiary budget goes to kids who don’t need it. Friends of mine are trying to change this by preparing poorer kids better for the entrance exams.

          I’d favour a system where university was basically free, and with useful scholarships for those who deserved them, but with more stringent entry requirements than at present. This could easily be paid for by a slightly higher tax rate on those who have already gone through university, such as myself and Paula Bennett. Alternatively, graduates could be bonded to perform community tasks for a couple of years after graduating. Once enough people realise education is not a commodity to be sold to individuals, just like a massage or a packet of biscuits, we’ll find a way.

      • Paul 1.2.2

        Scotland
        Free tertiary education

      • AmaKiwi 1.2.3

        “Are there any other education models overseas that we could perhaps emulate?”

        “Bonding” is another alternative for occupations that provide public essential services: doctors, nurses, teachers, etc.

        Personal example: In return for a free education you agree to spend 4 years working in a designated area of extreme need (rural or poor area). We had a lovely doctor and his young family serve in our rural town. 20 years later they are still there. They decided it was a much better lifestyle than working 60 hours a week in a flash suburb trying to retire the huge debt a medical education requires.

    • Morrissey 1.3

      Maybe you could read some of what Chomsky has written about the subject of education over the last forty years.

      • Paul 1.3.1

        Right wingers believe the neoliberal doctrine.
        There is no alternative for them, as their mantra dictates.
        So they don’t read other ideas.

        • Morrissey 1.3.1.1

          Sadly, they don’t read, full stop. Lanthanide wouldn’t have expressed his bewilderment like he did if he had bothered to read some of Chomsky’s voluminous writing about education.

    • Pawsharkial 1.4

      La

      “students who should be doing something else” – what precisely? Emigration? Crime? There are not so many jobs around these days for those without any formal education. Apprenticeships are rare, and polytechs are being squeezed, so many end up at private institutes that milk them for all they can get.

      Languishing on a benefit isn’t socially beneficial, but has better income than study and doesn’t have to be repaid. OAB links show ways in which scarce resources have been put into furthering education for collective good (in Germany & Finland – I think Denmark also has no fees/ loans). The NZ politicians who instituted the high fee/ loan system (Goff & Smith in their forefront) had their own educations paid for by the state at a time when the country was monetarily poorer.

      • One Anonymous Bloke 1.4.1

        Education is most valuable when given away. It is the wealth of nations.

      • Lanthanide 1.4.2

        ““students who should be doing something else” – what precisely? Emigration? Crime? There are not so many jobs around these days for those without any formal education. Apprenticeships are rare, and polytechs are being squeezed, so many end up at private institutes that milk them for all they can get.”

        There should be more jobs, more apprenticeships, better funded and more polytech courses.

        At no point am I blaming the students, who are the victims of these diploma mills. I simply said they should be doing something else.

        “Languishing on a benefit isn’t socially beneficial, but has better income than study and doesn’t have to be repaid. ”

        Going to a diploma mill, getting a student loan and then ending up in a crappy dead-end / low-wage job, or no job at all, isn’t much better.

    • Colonial Rawshark 1.5

      It’s true, but I’d like to see what other system he proposes to distribute scarce resources in a fair manner without waste.

      What the hell, Lanth. What “scarce resources” are you talking about here. What “waste” are you talking about here?

      Are children hungry in NZ because there is a “scarcity” of food? Are pensioners in NZ cold because there is a “scarcity” of power? Are hospitals and schools understaffed because of a “scarcity” of nurses and teachers? Get a grip.

      What Chomsky is pointing to is a bloody simple idea: the economic system is currently set up as a system of social control and rationing. High controls and strict rationing on the bottom 90% of society. Absolutely minimal controls and rationing on the top 10% of society (but especially the top 0.1%).

      FFS man, can you not see the real “waste” which is happening day to day is letting Kiwis rot in a toxic mix of idleness and ignorance?

      • Draco T Bastard 1.5.1

        +1

        We cannot afford the rich.

        • AmaKiwi 1.5.1.1

          “We cannot afford the rich.”

          Damn right!

          In 1789 the French came to the same conclusion.

      • Lanthanide 1.5.2

        “What the hell, Lanth. What “scarce resources” are you talking about here. What “waste” are you talking about here?”

        I was talking very generally about market-based economies, where the market puts prices on goods and services, which acts as a self-balancing system to minimise waste. Nothing more.

        In this particular case, making education completely free leads to waste in the form of people doing study that doesn’t benefit themselves or society at large, hence my further statement that we already have too many diploma mills in this country.

        • Draco T Bastard 1.5.2.1

          I think you’ll find that there’s more actual waste in the level of unemployment – a level of unemployment that economists say is normal for market based economies. Even education that doesn’t seem to benefit society benefits society as it increases critical thinking levels. And free education means that those people could always go off and get one of those useful degrees later.

        • Colonial Rawshark 1.5.2.2

          I was talking very generally about market-based economies, where the market puts prices on goods and services, which acts as a self-balancing system to minimise waste. Nothing more.

          Why don’t you check out your nearest council landfill Lanth, to see how deeply mistaken you are.

          In this particular case, making education completely free leads to waste in the form of people doing study that doesn’t benefit themselves or society at large, hence my further statement that we already have too many diploma mills in this country.

          Bullshit. The level of fees charged for education have NOTHING to do with the poor design and quality of some tertiary offerings. That’s down to the lack of judgement, purpose, public service values and vision of the supposedly experienced senior management and PhD qualified heads of those “educational institutions.”

          And its down to the corporatisation of education: where the only subject areas valued are the ones which help commercial enterprises make more money.

          • Lanthanide 1.5.2.2.1

            “Why don’t you check out your nearest council landfill Lanth, to see how deeply mistaken you are.”

            Hmm, that is a good point. Certainly the profit margin drives companies to make products with built-in obsolescence, which can only be seen as ‘waste’ in the grand scheme of things. I guess that’s a large part of the contribution for why we aren’t all working 10-15 hours a week with lots of leisure time: if the products we bought actually lasted as long as they could/should, we’d have less need of money and less need to work, as well as less work needing to be done.

            But in general it is true. For example, in winter, the supply of summer vegetables goes down, pushing the prices up, reducing demand and ensuring that production of winter vegetables is favoured, reducing mis-allocation of resources on summer vegetable crops, etc.

            “And its down to the corporatisation of education: where the only subject areas valued are the ones which help commercial enterprises make more money.”

            I don’t really have a problem with fine arts degrees, or BAs etc.

            My beef is with the private education providers, of which there are huge numbers, who promise things like great careers in IT if you just go study with them… who place you in a call-centre tech support job for an ISP.

            • Colonial Rawshark 1.5.2.2.1.1

              Your case by case reasoning is excellent Lanth, but your general case reasoning is highly suspect. I think that is a function of you applying orthodox economic decision making frameworks to areas they are not valid for i.e. 90% of society.

        • Murray Rawshark 1.5.2.3

          The diploma mills exist precisely because the government hands out student loans to pay the exorbitant fees. If education were free, they’d disappear.

          • Lanthanide 1.5.2.3.1

            Er, no, education is not “free”, it’s just that the state pays for it.

            The difference between “free education” and what we have now, is that you eventually have to pay for the cost of the education yourself, but on an interest-free term (unless you leave the country).

            This simply means that instead of going to a diploma mill, getting a crappy bit of paper and a $5k loan, you’d go to the diploma mill and get a crappy bit of paper.

            • Murray Rawshark 1.5.2.3.1.1

              Nope. Then the government would be paying money to the diploma mill. At the moment they are lending it to the students. What they lend out, they get back.

              And thanks for telling me that free education is paid by our taxes.

    • nafu 1.6

      Prior to the neoliberal “reforms” of the ’80s and ’90s, higher education in NZ was free. We hardly need another system.

      To answer your question though, Noam Chomsky has been an anarchist his whole life. An explanation of anarchism or communism would be beyond the scope of this discussion, but you can read some of Chomsky’s thoughts on anarchism and student debt here.

    • Tracey 1.7

      what is your definition of dubious value?

    • Tracey 1.8

      you can easily find out. he has written alot in the past few decades on it.

  2. Jono 2

    You also probably get less innovation and entrepreneurship because you are coming out of Tech or Uni already saddled with debt and staring down the barrell of an enormous mortgage to get onto the property ladder. The Atlantic Monthly recently ran an article here http://www.theatlantic.com/magazine/archive/2014/10/the-disruption-myth/379348/2/ about the slowing pace of innovative disruption and the establishment of new businesses in the US. Gee, do you think a $100,000 debt for your degree might be a factor??

  3. greywarshark 3

    Unnecessary education – demanded by employers and government scourges you to get it. Students are suffering from what they call credential-inflation. How to cut this out? Break through that system of requiring students to have full skills before you hire them. Encourage employers to train staff on the job. And then encourage them in a system where you work your way up, get seniority and better pay. That implies that employers want to keep staff on of course. But at present most want to be able to go to the shelf and pick up a barbie or ken doll, wind it up and put it on the shop floor smiles, arms and legs all working perfectly.

    So they demand students spend their own money on the perhaps of getting a job for which they may apply numerous times and never even get the courtesy of a photocopied acknowledgment with their name written in the square at the top.
    Employers and the whole shonky right wing approach has whipped away. employment, Also the loss of jobs providing jobs that led on to other jobs for NZ that would give us a healthy economy.

    Education is now the Land of Oz where you go and pay for magic employment dust which you try to spread around, sometimes successfully. Lecturers noticed once the fees became a major expense, students limited what they wanted to learn to ensure they could pass their papers. The passing was important, the cost was a burden. Not getting a higher education. And for government education gets you off the unemployment statistics, that it must keep at a certain level on the OECD list of countries they are helping to do over, I mean renovate.

    We’ve had The Age of Enlightenment which apparently ended at the start of the 1800s. So do we have the De-Enlightenment now.? The Age of Murky Darkness or The New Dark Ages with the religion of money defining everything? Why don’t we continue with the old enlightened ideas now? What is so wrong with following the prescription?

    The Age of Enlightenment (or simply the Enlightenment or Age of Reason) was a cultural movement of intellectuals beginning in late 17th-century Western Europe emphasizing reason and individualism rather than tradition.[1] It spread across Europe and to the United States, continuing to the end of the 18th century. Its purpose was to reform society using reason, to challenge ideas grounded in tradition and faith, and to advance knowledge through the scientific method. It promoted scientific thought, skepticism, and intellectual interchange.[2] The Enlightenment was a revolution in human thought. This new way of thinking was that rational thought begins with clearly stated principles, uses correct logic to arrive at conclusions, tests the conclusions against evidence, and then revises the principles in the light of the evidence. wikipedia.
    edited.

  4. One Anonymous Bloke 4

    As the countries that aren’t infested with right wing education policy continue to leave us behind, and get all the best investment opportunities, the policy will fail and fail and fail, while wingnuts wail and wail and wail, and cling even harder to their failure.

    It’s happening now.

  5. Chooky Shark Smile 5

    Noam Chomsky has hit the education nail on the head….and Cuba is a case in point ( the true story you never heard from the USA):

    For a long time Cuba has been one of the leading countries as regards education in Central and South America…due to widely available , affordable/free high quality state education

    http://en.wikipedia.org/wiki/Education_in_Cuba

    “Following the 1959 revolution, the Castro government nationalized all educational institutions, and created a system operated entirely by the government…..

    Education expenditures continue to receive high priority, as Cuba spends 10 percent of its central budget on education, compared with 4 percent in the United Kingdom and just 2 percent in the United States, according to UNESCO.[6]…

    In 1995, the literacy rate was 96%. This was second after Argentina of thirteen Latin American countries surveyed…

    Cuba has 47 universities and total university enrollment is approximately 112,000 citizens….All higher education institutions are public.

    Cuba is a world leader in the education and training of doctors…it turns out many , many doctors. As the Michael Moore documentary on USA health System ‘SICKO’ graphically and ironically pointed out Cuban public health care is vastly superior to that in USA..

    In fact the Cubans even train doctors who cant afford to be trained in their own countries….”In 1999 a program was implemented to attract students to study medicine in Cuba from less privileged backgrounds in the United States, Britain and Latin American, Caribbean, and African nations.[27] Cuba currently hosts 3432 medical students from 23 nations studying in Havana.[28]

    However, Cuba has also provided state subsidized education to foreign nationals under specific programs, including U.S. students who are trained as doctors at the Latin American School of Medicine. The program provides for full scholarships, including accommodation, and its graduates are meant to return to the US to offer low-cost healthcare.”…

  6. ianmac 6

    There are two parts to the student debt. Course university fees then the living allowance loans of about $150 per week which is claimed by those who are not living at home. The latter are the crunch items which raise the total to huge heights.

  7. Dialey 7

    free broad humanities (philosophy, history, languages, arts, classics etc) based undergrad degree first then specialise into higher levels once you have learned to think widely and understand historical and cultural perspectives.

  8. Bill 8

    Loans and debt aside, when university students are almost entirely from the middle class, their world views are never seriously challenged, and so conservatism/orthodoxy deepens at an intergenerational level.

    It’s no coincidence that student based activism spiked in the 60s when a fair proportion of students were from working class backgrounds. The prospect of debt and an inability to access ‘lifeboat funds’ from parents when going through University, more or less excludes the working class these days.

    Just thought it worth mentioning.

    • Chooky Shark Smile 8.1

      +100 Bill…and the cost of tertiary education and the difficulty in finding jobs and paying back loans for university education …..also channels students into strictly vocational degrees

      …again less time for thinking and reading and researching and learning and critical thinking about deep philosophical , psychological, political, social , religious and historical issues

      ….university education is being undermined from within as well as from without

      …university education is becoming training for a professional vocation rather than the education of the whole person…and society as well as the individual is the loser

    • miravox 8.2

      “when university students are almost entirely from the middle class, their world views are never seriously challenged, and so conservatism/orthodoxy deepens at an intergenerational level.”

      Yup. From personal experience, I’ll agree with you there Bill. My unconventional academic path has led me to ‘surprise’ fellow students and mentors with the way I understand how societal structures are perceived and operate compared with the way they treat societal structures as uncontested best practice that people must fit into

    • Marksman33 8.3

      Well worth mentioning Bill.

    • mac1 8.4

      Bill, not sure about your assertion that university students were more representative of working class backgrounds (in NZ?) than these days.

      Small sample etc etc but in 1969 NZ History tutorial of some 15 students, asked about our class origins, all but one were middle class. We believed then that university was the prerogative of the middle class.

      Have you some research to indicate otherwise?

      We middle class students of the late sixties sure knew about student activism though- Harewood bases, Omega, Vietnam, Peace Power and Politics in Asia, student representation at Uni. I’m the son of a grocer- “petit bourgeois” was my answer to the question. I spent very little time studying in 1968 failing all but one of my units, but spent a lot of time challenging the values of the day.

      My sense is that more working class folk are getting to Uni as numbers increase and more degrees as a percentage are awarded to attendees, or are working class numbers diminishing? Could be wrong though.

  9. Draco T Bastard 9

    The Death of American Universities

    That’s the way you keep societies efficient and healthy from the point of view of the corporations. And as universities move towards a corporate business model, precarity is exactly what is being imposed. And we’ll see more and more of it.

    And we see it here as well as National make more corporate changes to our universities.

  10. Vaughan Little 10

    David Harvey makes the same point as Chomsky , but about mortgages. people with mortgages don’t srrike. they also tend to develop certain attitudes like cynical detachment.. having no considerable assets and being Christian have a complementary effect on me – both things free me up to be experimental with my life. currently I’m doing business and I feel totally free to charge people what I think is fair, instead of maxing out my fees according to market rates, which in my line of work are desperately, corrosively cynical. so, that’s a wonderful liberty that I have. also, following Christ requires you to be a bit cavalier about conventional wisdom. like eagleton says, if it doesn’t get you killed it appears that you have some explaining to do. on the path of radical integrity are deep suffering and profound peace.

  11. Once Was Tim 11

    Another BIIIIIIIIG opportunity for the Labour Party to shine with some sensible policy huh?
    But will they/won’t they?

    • Draco T Bastard 11.1

      Nope, they won’t as they’re far too busy trying to balance the books by not raising taxes.

      • TA 11.1.1

        Amen Draco,

        They dress up with a partial conscience when they think it may benefit them – couldn’t bring myself to vote for them this election and I’ve been left my whole life.

  12. TA 12

    Check out this guy burning his worthless college degree, law degree, licence to practise law and computer science degree at the 30 minute mark:

    All this guy has got round his neck is a millstone of debt.

  13. Paul 13

    Student debt made the Herald last weekend.
    Verity Johnson writes..

    “Students are increasingly worried about money. Not, “how many boxes of wine can I buy with all the change under the sofa?” But, “how will my degree get me a stable future career that repays my gaping debts?” This manifests itself in the serious, grey and practical pall that has settled over us students. I don’t blame us students. The message behind universities has changed historically.

    Once, uni was about knowledge. Now we’re told to pick sensible degrees that will get us a sensible job with a sensible salary.

    University is supposed to be about stretching your mind. This model makes it about your stretched pocket.”

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11336749

  14. Mr Bean 14

    Hi Students, join the Nact party, suck up now and avoid your student debt, otherwise this awaits you:

    Could’nt happen in NZ, now could it. Thats what ya voted for….debt slavery:

    http://etfdailynews.com/2014/10/09/why-the-student-loan-debt-crisis-is-out-of-control/

    The following are 18 sobering facts about the unprecedented student loan debt crisis in the United States…

    #1 According to the Wall Street Journal, the class of 2014 is “the most indebted ever“…http://blogs.wsj.com/numbers/congatulations-to-class-of-2014-the-most-indebted-ever-1368/

    #2 In 1994, less than half of all college graduates left school with student loan debt. Today, it is over 70 percent.

    #3 Approximately 15 percent of graduate and professional school students leave school with student loan debt balances in the six figures.
    #4 At this point, student loan debt has hit a grand total of 1.2 trillion dollars in the United States. That number has grown by about 84 percent just since 2008.

    #5 According to the Pew Research Center, nearly four out of every ten U.S. households that are led by someone under the age of 40 is paying off student loan debt right now.

    #6 The median net worth of young households that have student loan debt is 20 percent lower than the median net worth of young households that do not have any student loan debt and that are led by someone with only a high school education.

    #7 Among college educated people, the median net worth of young households that do not have student loan debt is seven times higher than the median net worth of young households that do have student loan debt.

    #8 In 2008, approximately 29 million Americans were paying off student loan debts. Today, that number has ballooned to 40 million.

    #9 Since 2005, student loan debt burdens have absolutely exploded while salaries for young college graduates have actually declined…

    #10 According to CNN, 260,000 Americans with a college or professional degree made at or below the federal minimum wage last year.

    #11 Even after accounting for inflation, the cost of college tuition increased by 275 percent between 1970 and 2013.

    #12 Debt for law school students has risen dramatically over the past decade or s

    #13 Last year it was being reported that 34.9 percent of all student loan borrowers under the age of 30 are at least 90 days behind on their student loan payments.

  15. Chooky Shark Smile 15

    sobering…and the USA model is the one New Zealand is following….screwing its own youth!…

    The debt New Zealand is putting on young people for tertiary education is a disgrace!

    ….It should have been a major Election issue!

    Labour did nothing and crushed the one party that was prepared to make Tertiary Education free…..the Mana/Internet Party

    …guess where all your youth votes have gone Labour?…they are NOT voting for you!

    • Mr Bean 15.1

      Chooky Shark Smile, you mentioned

      “Labour did nothing and crushed the one party that was prepared to make Tertiary Education free…..the Mana/Internet Party”

      Actually, that comment, made me get off my lazy arse and do just a little research.

      Yeah, gutting, old Roger Me Now Nomics helped put the wedge in a while back, then down track, labour removed the interest on student loans. National introduced EFTs system and has been quielty removing funding from Universities since (are they not dropping in rankings?). So, changes were made to fund the increased projections of students entering Universities. But I really do not trust any of the powers that be, that further changes (taxes) will eventually turn up.

      That aside, here as some good links (which informed me from both sides of the fence): Again, however, we do seem to be following the USA and GB, and their projections are not looking pretty.

      So a recipe for wage slave =

      Average UK student debts ‘could hit £53,000’
      https://www.bbc.com/news/education-14488312

      +

      NZ house prices among world’s highest
      http://www.stuff.co.nz/business/money/10450981/NZ-house-prices-among-worlds-highest

      +

      Who gets the best jobs (the rich kids of course)
      http://www.mirror.co.uk/tv/tv-previews/who-gets-the-best-jobs—107947

      If you read these links, it may help balance the picture (for the left or right view)

      1. Since April 2006, student borrowers living in New Zealand have not had to pay any interest.
      http://www.stuff.co.nz/business/money/8197323/Bitter-pill-should-be-swallowed

      2. It was National that introduced the “bums on seats” funding model, in which universities were funded based on the number of equivalent full-time students (EFTS) enrolled.

      Throughout National’s nine years in power, government funding of the tertiary education sector steadily decreased. Universities resorted to rising student fees to cover deficits, a trend that still persists at universities across the country. The election of Labour in 1999 did not stem the tide of changes to the way tertiary education is funded in this country.

      http://salient.org.nz/features/a-short-history-of-tertiary-education-funding-in-new-zealand

      ( a good summary of Universities and costs up to 2009). Aside it was National who did not want to touch the topic of taxing students… political expedience only… not love.

      3. Total student loan debt sits at $13 billion, and is projected to hit $14b – the size of the annual health budget – by 2015.
      http://www.stuff.co.nz/business/budget-2013/8683203/Student-loan-defaulters-to-face-border-arrest

      4. Heres the biggest for last (but remember, there is no mention of DOL studies and if people end up in their intended field etc). As with many stats, there are positives and Negatives:

      http://www.educationcounts.govt.nz/publications/series/2555/student-loan-scheme-annual-report-2013
      Student Loan Scheme Annual Report 2013
      Publication Details

      The Student Loans Scheme Annual Report 2013 provides information on the scheme and those who borrowed from it in 2012, as well as the financial schedules for the year to 30 June 2013. The information in the report aligns with the outcomes framework developed by the agencies that manage and administer the scheme. Key findings in the report are:

      The nominal value of loan balances was $13,562 million as at 30 June 2013.
      201,187 students borrowed from the loan scheme in 2012 (73 percent of eligible students).
      As at 30 June 2013, 710,000 people had a student loan with Inland Revenue.
      The median repayment time for those who left study in 2009 and remained in New Zealand was 6.7 years.
      Author(s): Ministry of Education.

      Date Published: December 2013

      Please consider the environment before printing the contents of this report.
      This report is available as a download (please refer to the ‘Downloads/Links’ inset box, top right). This inset box also has links to related publications and information that may be of interest. Please consider the environment before printing.

      Highlights

      Student Loan Scheme portfolio

      As at 30 June 2013:

      The nominal value of loan balances was $13,562 million. (Refer to chapter 4.0.)
      The carrying value of the loan scheme – calculated using International Financing Reporting Standards – was $8,288 million. (Refer to chapter 4.0.)
      The carrying value ratio increased from 63.9 percent of the nominal value to 61.1 percent of the nominal value ratio. (Refer to chapter 4.1.)
      The fair value of the loan scheme was approximately $8,298 million. (Refer to chapter 4.0.)
      The cost of lending is forecast to increase to 40 cents per dollar for the period 1 July 2013 to 31 December 2013. It is forecast to increase to 42 cents for each dollar lent by 2016/17. (Refer to chapter 4.2)
      710,968 people had a student loan with Inland Revenue for collection. (Refer to chapter 3.2.)

      Since the loan scheme began:

      Students have borrowed a total of $18,520 million. (Refer to chapter 3.1.)
      $8,125 million has been collected in loan repayments. (Refer to chapter 3.3.)
      More than 374,000 loans have been fully repaid. (Refer to chapter 3.3.)

      During 2012/13:

      $1,150.7 million in loan repayments was received by Inland Revenue and the Ministry of Social Development, $274.2 million more than last year. (Refer to chapter 5.3)
      Outcomes

      Research shows that people with tertiary qualifications have lower unemployment, higher incomes and increased wellbeing. (Refer to chapter 2.2.)

      The number of domestic students in tertiary education in 2012 was 375,000 compared with 245,000, the number enrolled in 1994. (Refer to chapter 1.1.)

      The participation rate for Māori of all ages was 14.6 percent in 2012, down from 15.1 percent in 2011. The participation rate of Pasifika students in 2012 was 11.4 percent, down from 11.5 percent in 2011. (Refer to chapter 1.1.)

      The total number of qualifications completed in 2012 was 143,000 by 126,000 domestic students, an increase of 2.7 percent from 2011. (Refer to chapter 1.1.)

      The total number of qualifications completed in the New Zealand tertiary system in 2012 was 162,000. (Refer to chapter 1.1.)
      About borrowing in 2012

      201,187 students (73 percent of eligible students) borrowed from the loan scheme. (Refer to chapter 3.1)

      Of these 54,836 were new borrowers (based on provisional Ministry of Social Development data), representing 27 percent of all borrowers. (Refer to chapter 3.1.)

      The average amount borrowed was $7,822 and the median amount borrowed was $6,9889. (Refer to chapter 3.1.)
      Borrowers

      Between 1997 and 2012:

      57 percent were female. (Refer to chapter 3.2.)
      48 percent were European, 22 percent were Māori, 12 percent were Asian and 9 percent were Pasifika. (Refer to chapter 3.2.)
      47 percent had studied at non-degree level, 35 percent at bachelors level and 9 percent at postgraduate level. (Refer to chapter 3.2.)

      As at 30 June 2013:

      The average loan held by Inland Revenue was $19,076 and the median loan balance was $13,307. (Refer to chapter 3.2.)
      57 percent of repayments were collected through the PAYE tax system in the 2012/13 tax year. (Refer to chapter 3.3.)
      Repayment times

      The median repayment time for those who finished study in 2003 was 7.2 years. (Refer to chapter 3.4.)
      The median repayment time for those who finished study in 2006 is expected to be 7.5 years. (Refer to chapter 3.4.)
      The median repayment time for those who finished study in 2009 is expected to by 7.3 years. (Refer to chapter 3.4.)
      The median repayment time for those who left study in 2009 and remained in New Zealand was 6.7 years. (Refer to chapter 3.4.)
      4.

  16. whateva next? 16

    Watching my daughters do exactly as Chomsky predicts, through sheer exhaustion (though they did come out and sign wave for Labour, and did hold hope for a while before the election):

    -trying to work (in ever more scarce part time jobs) around impossible timetables, not announced until the last minute

    -studying with increasing sense of detachment from reality by universities having to assume “corporate” competitive models

    -educational inflation means they have to do masters, so studying goes on…and on… and costs more and more….

    And then the job market is so tight you need contacts to get a foot in the door, if we are honest, so how to pay off student debt, they can’t afford to work overseas as the debt increases even more.

    The logical conclusion to this? Only the rich (but not necessarily the bright and motivated) will have a decent education…hey just like the old days!!

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