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Interest Free Student Loans

Right now, New Zealand has interest free student loans. It’s a bit of sloppy system – StudyLink, which is a arm of the Ministry of Social Development for students, opens the loan account and charges interest. Then the loan gets transferred to the Inland Revenue Department who then write off that interest. This is one of the few policies of that previous government that actually made sense. However, the current government has effective decided to ask students to leave the country after they qualify, by saying that interest free student loans will only be available for “6 or 7 years”, according to Tertiary Education Minister, Stephen Joyce on TVNZ’s Q+A program yesterday.

I can’t talk for other students, but I am going to be completely honest now. If only get one or two years to pay off my student loan or I get charged interest, I will not stay in New Zealand. I will be leaving this country. It is unfortunate, because I feel that New Zealand is my home, but I will change my view if it is financially unrealistic for me to be here.

This really is what it boils down to. I will go overseas to travel. If I am getting charged interest on my student loan, I won’t come back. If I’m not getting charged, I will. Surely the government can see that if people are going to leave anyway, they lose money if its before they pay their loan. The comment that they will leave anyway if interest free loans is a priority over tax cuts is therefore void, because the government is better off getting their money back from the loan.

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