Student Loan Debt Not Deterring Young People

  • David Carter
Associate Minister of Revenue

"Student loan debt is not deterring young people from furthering their education or their life experiences," says Associate Revenue Minister Hon David Carter.

"The student loan scheme is responsible for significantly increasing tertiary participation. In 1991 we had around 142,000 students in tertiary education, last year it was around 214,000. That's more than 50,000 students who wouldn't have been studying if we hadn't provided support."

"Funding for tertiary education, including student support, will hit nearly $2 billion in 1999/2000, an increase of more than $80 million from this year. Tertiary funding will then have increased by more than $230,000 million in the last five years."

Releasing today the number of new student loan borrowers, Mr Carter said Inland Revenue's figures showed student loans had become an accepted part of the tertiary experience.

As of March this year close to 30,000 new borrowers took out student loans, taking the total number of student borrowers to just over 250,000, up from 190,654 in 1997 .

New borrowers this year made up 12 percent of those borrowing under the student loan scheme, down from 14 percent in 1998 and 17 percent in 1997.

Mr Carter also released the total owed by non-resident borrowers under the student loan scheme which as of April this year came to $101 million. The average owed by non-resident borrowers under the scheme is $14,086.

Mr Carter said most non-resident borrowers were young New Zealanders who had completed their tertiary education and were now living overseas.

"Their student loan debt obviously hasn't deterred them from exploring new horizons and widening their working experiences. Student debt is not the millstone it's made out to be."

"We also have to remember that students are not the only ones carrying debt in our society. The young farmer starting out, the entrepreneur looking to buy his own business and the home-owner all require loans and Government hasn't acted to make their loan conditions more palatable."

"Students are investing in their future when they undertake further training, and this Government is supporting them doing so by providing a student loan scheme which makes tertiary education much more accessible."