Wed, 23 Feb 2005

Students saved $250 million in wiped interest

since the introduction of the Labour-led government's interest write off policy in 2000 tertiary students have been saved more than $250 million in waived interest charges.

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Tertiary students have been saved more than $250 million in waived interest charges since the introduction of the Labour-led government's interest write off policy in 2000, Education Minister Trevor Mallard announced today.

"As students begin orientation at tertiary campuses around the country this week, it is worthwhile to do a stocktake of the improvements this government has made in student support since coming into power.

"Between 2000 and 2004, students have been saved $250.9 million in interest charges that have been written off as a result of the full interest write-off policy introduced in 2000.

"Labour has kept its word to students and their families by making tertiary education more accessible and more affordable.

"Under National during the 1990s, student fees and student debt were spiralling out of control. Average tuition fees increased by 40 per cent from $2,514 in 1997 to over $3,531 by the time we delivered our first Budget in 2000.

"By contrast, under Labour the growth in the average student loan balance between 2000 and 2004 was just 15.4 per cent and average tuition fees have fallen by 25 per cent since 2000, to $2667 in 2003.

"The student loan write off policy means that most students are not charged interest while studying, Student loan repayment policies have also been changed so that at least half of all repayments go to the principal part of the loan. Interest no longer mounts up uncontrollably like it used to.

"These changes contributed to a considerable reduction in the average repayment time for student loans. Estimated loan repayment times have decreased from 14.8 years in 1999 to 9.3 years currently.

"This year we've also made big changes to the eligibility criteria for student allowances. Budget 2004 injected an additional $110 million in student support, and we're expecting borrowing by students to down by around $20 million a year as a result.

"Overall 36,000 students have gained from Budget 2004 and now nearly half the full-time student population receives an allowance. "Labour is committed to giving students a fair go, we know more needs to be done and we are progressively improving student loan and allowance rules," Trevor Mallard said.

ENDS

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