Respect for Taxpayer Funding

News: Loans
The majority of students use their student loans to get an education, then a job, but there needs to be more "respect for taxpayer funding", Prime Minister John Key says.

Tertiary Education Minister Steven Joyce yesterday told TVNZ's Q+A programme the Government was considering limiting the period undergraduate students could access interest-free student loans, possibly to six or seven years.

That could save about $10 million to $20 million a year on the interest-free loans scheme, which costs about $1.5 billion per annum. Mr Key today said while the Government could afford interest-free student loans there needed to be greater respect for taxpayer funding.

"The poor old cleaner that's out there, working from midnight to six in the morning, or eight in the morning, working their socks off to get paid the minimum wage is actually paying taxes to go to the students, that's fine as long as the students actually taking the process seriously."

Taxpayers paid the "overwhelming majority" of the cost of sending a student to university and the students did not understand that, he told TVNZ's Breakfast.

But he said Government would not be doing away with interest-free loans.
"The bulk of students go to university, get a student loan, treat the process seriously and actually form an important part of our economy".
"We need those doctors, we need those nurses," he said.
"But, we will be making sure the systems a bit fairer."

Mr Joyce yesterday also said the Government was considering implementing a two-year stand-down period before new permanent residents can borrow from the Government to fund tertiary studies here.

He told Q+A permanent residents, including Australians, currently wait two years for a student allowance or a social welfare benefit. "But you're allowed to borrow for a student loan the moment you arrive, and that creates some interesting incentives for people to sign up to tertiary institutions where perhaps they're not as committed to the country, or not committed to tertiary education as perhaps others would be."

Refugee Services chief executive Heather Hayden yesterday told the Herald her organisation wanted to see more detail around the proposal but would be "very concerned if there was any barrier at all to refugees as new citizens in New Zealand being able to access tertiary education".