Labour Will Increase Student DebtTertiary Education
Steve Maharey's comments about student debt are nothing more than hand-wringing given that Labour's policy would make student debt worse, Tertiary Education Minister Max Bradford said today.
"National is responsibly offering students still studying an effective interest cut without adding the incentive to borrow to the hilt.
"But, Labour is acting like an irresponsible parent by offering interest-free loans to students studying.
"If you make something free any rational person would take advantage of this and students are no different," Mr Bradford said.
"Currently, only half of students borrow. Under Labour's policy the other half would surely take out a loan when they don't need to, which would see the student debt figure skyrocket.
"Labour's bribe will mean students will pay back their loans only 1-2 years earlier compared to National's policy.
"Under National the interest rate for students still studying is reduced to 5.7%. This alteration of the Scheme was announced in November 1998, long before the election.
"Labour's policy, and the even more loopy policies of the Alliance, simply mean that taxes will have to increase which will not be appreciated by students once they start full time jobs," Mr Bradford said.