National Debt Day last Wednesday saw students’ associations nationwide grieve mounting levels of student debt reaching $9 billion.
An Organisation for Economic Co-operation and Development (OECD) report released in February acknowledged that, “the current (New Zealand) system does not address to the full extent the financial barriers students face in accessing tertiary education”.
While it reported that the level of student support was the highest in the OECD, government loans make up 30 percent of the total, most of which will be repaid, some with interest from borrowers overseas.
Student allowance funding dropped from 15.5 percent of Government Tertiary Education spending in 1999/2000 to on 10.2 percent in 2004/2005. During this time loans spending increased from 22 percent to 26.8 percent.
NZUSA Co-President Joey Randall says that New Zealand is “one of the most indebted societies when it comes to tertiary education.” “In the developed world we have the highest rate of borrowing for a scheme, so as a percentage of what we spend, it was 400 times the average for the OECD for loans.”
NZUSA further called on the government to honor their election promise to increase access to allowances to 50% of all eligible students, and to progressively introduce a universal living allowance for all students.
Responding to the protests, Minister for Tertiary Education Dr Michael Cullen put a positive spin on the interest-free policy. He said that the support students have received from the Government over the last seven years has been significant, and have broadened access to tertiary education.
“On 1 April we celebrate an important milestone – one year of interest-free student loans. This is saving students thousands of dollars and shaving years off repayment times,” he said.
“We shouldn’t forget that this is $9 billion of interest-free debt – effectively a saving of half a billion dollars a year in interest that would have been paid under the old scheme. On average, this represents a saving of just under a thousand dollars for every student every year.”
VUWSA marked Debt Day with a barbecue and speakers in the Quad after being forced to postpone an intended Lambton Quay protest due to overshadowing by protestors marching against Green MP Sue Bradford’s ‘anti-smacking Bill’.
VUWSA President Geoff Hayward says the Association intends to reschedule some kind of action to raise awareness about student debt for coming weeks.