Education should be free. I think student loans are among the stupidest things that NZ governments (from both sides of the political fence) have ever done. It should be possible for the average young Kiwi to gain a tertiary education without having to shoulder a crushing burden of debt. It is intergenerational theft.
One of the worst effects of student loans is to drive young graduates overseas. We spend tens of thousands of tax payer’s dollars on their excellent education, and then build in a huge financial incentive for them to leave this country and never come back. What could possibly be stupider?
The last Labour government at least made a start on addressing this problem with interest free loans. (They should have done so much more than that!) National will be letting fees rise and making the situation worse. But at least it appears that they are going to do one small thing right, and it’s grand to be able to congratulate them (for a change) on this announcement yesterday:
The Government is to reduce late repayment penalties for student loan “refugees” staying overseas because of their student debt, Revenue Minister Peter Dunne says.
Speaking at Auckland University of Technology yesterday Mr Dunne said the student loan scheme “could burden New Zealand graduates on OE (overseas experience) with such enormous penalties they were effectively barred from ever returning to New Zealand”.
“A measure soon to be introduced will reduce the penalties to address this issue.”
That article doesn’t have any specific numbers other than the total cost of unpaid penalties, $56.6 million. But let’s hope that the reductions are significant. Better still, write the penalties off all together. Let them come home.