Interest on student loans?

[Pakage]

$11b student loan debt a disaster, says Key

 

Fresh calls have been made for interest to be reintroduced on student loans after Prime Minister John Key said student debt was a disaster economically.

 

"If you're an investment banker – not that I am these days – you'd say it's a disaster of a loan book," he told students at Victoria University's Weir House yesterday.

 

"It's $11 billion, roughly, at the moment and we collect 53 cents in the dollar, that's it. Fifty-three cents in the dollar. If you just sat there, logically, you'd say there has to be a better way of doing it."

 

The Government has already announced moves to tighten access to the student loan scheme.

 

Full Article on stuff.co.nz

 

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My student loan currently is sitting at about $20,000 AFAIK (Im too scared to check how much it actually is). I pay it off every week out of my pay cheque. Interest on student loans is not a good idea as far as im concerned. At the old interest rates, my payments would barely cover the cost of the interest and hardly pay off any of my loan.

 

While i agree they should be getting back more than 53c in the dollar. There must be some reason for this. Its a shame he doesnt back up that statistic with some facts or explanation.

 

When i went to AUT there was interest on student loans. It didnt stop me from going to University but imo it would for some people, especially those in lower income families who have less financial security than i was privileged to.

 

The quest for higher education should not be punished with loans that are a struggle to pay off over the next half of your working lives, it should be rewarded.

 

IMO they should remain interest free. Perhaps a better screening process is needed or maybe cap the amount you can get on a student loan so people dont just mooch around studying forever.

 

What do you think?

[Known One]

The way John Key paints it is pretty misleading... 53 Cents in the dollar... what's the figure if you take people who are currently studying/just finished uni seeking employment out of the picture.

 

100% of the people I know who have student loans are paying them back and will pay them back 100%. Some of these people have been overseas for years at my age and have returned with inflated loans due to interest applied while away. Feel quite sorry for those people.

 

The was I see it... Student loans from government are an investment into education... they are indirectly an investment financially as higher a educated workforce will generate a stronger economy. If the government is loosing money on the loans scheme, it should be recognised that the country is gaining as a whole on education and that's a good trade-off.

 

Leave the loans alone imo.

 

ps... 26K in 2005, loan free in December 2011...

[Dr Awesome]

Interest Free while you live in NZ.

In high-expense cases such as medical training, loans should be wiped in exchange for staying in NZ and working at a government approved workplace for x (5?) years - thus getting doctors to small towns.

[Eaze]

Interest Free while you live in NZ.

In high-expense cases such as medical training, loans should be wiped in exchange for staying in NZ and working at a government approved workplace for x (5?) years - thus getting doctors to small towns.

 

Agreed, freshly qualified professionals gaping NZ kind of defeats the purpose 4 interest free student loans

[Pakage]

yeah thats a good point. but if you have to do x many years service, then that makes it kinda like how the armed forces work. However, in the armed forces, the education is free not just interest free loan. But then again i guess you could be risking your life being in the armed forces if they get deployed.

 

free education for garunteed x many years service but if you bail on the deal before your service is due it becomes a loan with interest?

 

hmmmmm..

[Grind]

Technically they're not actually "interest-free" loans right? As loans they still accumulate interest (ie. debt), it's just that the government "writes it off" for us.

 

Personally I'm in favour of them but think the system could do with a shake-up. It's a piss-take how you can get $150 per week + course costs etc (ie. CASH) and it's interest free.

[perceptualChaos]

I think they provide a good incentive for people to stay in NZ, and as Craig mentioned - to study in the first place for people from families with lower incomes. I'm sure it could be managed a bit better though, as the system is surely getting abused by people who don't really need the loan, rather it just makes financial sense for them to get one.

[Jo]

$11b student loan debt a disaster, says Key

 

It is a disaster... completely.

 

The Government has been made aware by students year after year of the rising student debt, adding interest back on now would have a colossal negative affect on students and their families and NZ as a whole.

 

A high percentage of students at polytechnics are second chance learners and they will more than often have families to look after while studying, not only are you having to make repayments no matter what you earn as soon as you take on any type of work (thanks to the changes in the loan scheme - if you weren't aware you should go on the studylink website and get well versed in the changes) we could be having interest added on and it will put people off from studying.

 

There is lots of documentation on the link between crime and not being educated however from what I can see there is an indication that the government sees the current upper class worker as a higher priority than ensuring NZ as a whole get educated and participate in the community leading to a healthier NZ and a safer country...

[Pakage]

Thanks for your input Jo

[Jo]

You're welcome Pakage.

 

Further just to bring people up to speed..

 

The Priminister was asked:

 

8. GRANT ROBERTSON to the Prime Minister: Does he stand by his

statement about the student loan scheme that “economically,

it doesn’t really stack up”; if so, what if anything, is

he going to do to make the scheme “stack up”?

 

you can find the full story on the scoop website http://www.scoop.co.nz/stories/PA1007/S00434.htm

 

Key has responded orally today in the house saying “It is my intention to keep interest free loans”. However mark my words this is not the first, second or even fifth time this government have said they would not do something and then have done it. So keep an eye out after the elections next year if National are back in as you could see it come back into fashion and try to pay off as much of your loan as possible!

[Taiko]

The quest for higher education should not be punished with loans that are a struggle to pay off over the next half of your working lives, it should be rewarded.

 

IMO they should remain interest free. Perhaps a better screening process is needed or maybe cap the amount you can get on a student loan so people dont just mooch around studying forever.

[zzzp]

The quest for higher education should not be punished with loans that are a struggle to pay off over the next half of your working lives, it should be rewarded.

 

IMO they should remain interest free. Perhaps a better screening process is needed or maybe cap the amount you can get on a student loan so people dont just mooch around studying forever.

 

Thats true.

 

+ a shake up on useless courses that really aint getting you shit, you know the ones.

[phonetics]

hmm, interesting how your loans are interest free here. never knew that.

 

my student loan (UK) had interest on it, but it was f*ck all really. like 10 GBP a month on 4000 GBP or something.

 

i never really had an issue with it, and it still remained the best loan you'd ever get for your $$$.