It’s no wonder student loan balances and repayment times have risen over the last six years, when students pay nothing back in interest, says the New Zealand Taxpayers’ Union.

Responding to Chris Hipkins' public comments this morning, Jack Close, a spokesperson for the Taxpayers’ Union, says “The removal of interest from student loans in 2005 has led to more students borrowing money, with no incentive to pay them back. When it doesn’t cost anything to pay a loan back slowly, you’d be financially illiterate to pay it back early and graduates know that."

"Opposition politicians can't have it both ways. They can either stick to their pet interest-free loan scheme, or they can complain about the level of loan balances and repayment times."
 
“The interest-free loan scheme is a wealth transfer from the poor and middle class to those with the highest earning potential. It's simply welfare for the rich."
 
“Graduates require less government assistance than any other group in New Zealand. There is no justification for free handouts in the form of interest write-offs other than as $6 billion vote-buying exercise.”
 
The Taxpayers’ Union encourages the new English leadership to take John Key’s advice that the current scheme is bad economics, and reinstate interest on student loans.

ENDS

NOTES TO EDITORS:

The New Zealand Taxpayers’ Union is an independent and membership-driven activist group, dedicated to being the voice for Kiwi taxpayers in the corridors of power.

The Taxpayers' Union operates a 24-hour media line for comment on taxpayer issues. Representatives are available on (04) 282 0302.

High-resolution images and logos are available on request or online at http://www.taxpayers.org.nz/resources