More Student Debt Under Labour

  • Max Bradford
Enterprise and Commerce

It is a sign of panic when Labour MPs try and make a story out of back-of-the envelope guesswork, Tertiary Education Minister Max Bradford said today.

Mr Bradford was responding to Labour education spokesman Steve Maharey's comments on a speculative media article about future student loan interest rates.

"The Government has announced changes that will effectively cut interest rates from the current 7% to 5.7% next year for students who are studying.

"The future course of student loan interest rates will be determined by the next government.

"The National party has already announced the formula for setting annual rates is under review," Mr Bradford said.

This was announced in the Bright Future Package on August 18.

"Until the reviews of the formula and the interest rate are complete, claims that rates will go up or down are pure speculation.

"Labour's policy of removing all interest on student loans while studying would see debt skyrocket. Students would hardly say no to a free loan and would end up borrowing more.

"And what is more, once students start full-time jobs many would face higher taxes as a reward for their hard work.

"Labour's policy would allow most students to repay loans only one or two years earlier, but they would have to pay higher taxes for the rest of their lives," Mr Bradford said.