A reader has asked us why we think interest free student loans are bad policy.
We were just about to explain when we read this from Business New Zealand. It says pretty much what we wanted to say.
Friday, 1 February 2008, 12:02 pmPress Release: Business New Zealand
1 February 2008
Vote-buying over student loans disappointing
Both main parties are vote-buying over student loans, says Business NZ Chief Executive Phil O'Reilly.
"The interest-free student loan policy is costing New Zealanders more than half a billion dollars each year - money that New Zealand as a whole gets no social value from. Adding in 'repayment bonuses' will make that cost even higher.
"This is money that is being diverted from funding teachers, facilities and world-class research.
"We have severe skills shortages in our workplaces and many young people are leaving school without enough skills to contribute to the workplace. Tertiary institutions can't get the funding to attract and keep key staff.
"There is some good work going on in education policy, but much more needs to be done. Pouring money into interest-free student loans is not addressing our fundamental needs in tertiary education."
