The recent Inland Revenue student loan scheme annual report for the 2004/05 academic year has shown that student borrowing has decreased for the first time since 1998/99.
Students borrowed $975 million in 2004/05, down from $997m the previous year. Inland Revenue’s report summary puts this down to declining Equivalent Full Time Students (EFTS) numbers, and increasing part-time student enrolments.
The report says of part-time students: they have lower entitlements under the scheme, face lower fees and are more inclined to finance their studies from other sources.”
National Party education spokesperson Bill English is quick to point out that the decrease in student borrowing began before the interest free policy came in” and suggests another factor is that people are no longer rushing straight to university from high school. “We’ve got people thinking pretty hard about whether the investment is worthwhile, and they go out and earn money. I think we should respect that decision.”
Marina Matthews, a spokesperson for the Minister of Education Michael Cullen, says that the decrease is nominal and it is too early to determine what this means.
The decrease is quite small; it’s less than one per cent overall. We think there’s been a small increase in the amount borrowed and we think in future there will be an increase in the total amount borrowed.”
Other key findings outlined in the 2004/05 report are that Inland Revenue expects total annual repayments to exceed total annual drawdowns by 2016, and that the level of student loan repayments continues to increase. To date, 680,000 people have used the scheme since it was introduced in 1992. Of these, 173,168 loans have been paid off completely to a total of $2,827m. The median student loan balance currently sits at $10,404.