21 July 2005 Media Statement

Nats offer pathetic student support - Mallard

National's student support policy is a complex and pathetic attempt that covers up the fact that fees will spiral upwards under National because of their plans to remove caps on fees and cut tertiary funding, Education Minister Trevor Mallard said today.

"The Brash policy is a complicated retrograde approach to student support that will punish non-working graduates including women who may take time out from the workforce to have children. It will also punish those on lower incomes.

"The way the rebate would work is inherently unfair as it means those on higher incomes will benefit much more than those who face the same interest rates but don't earn as much," Trevor Mallard said.

"The policy also does nothing to address allowances and fees.

"Bill English has already pledged to do away with the fee maxima policy, which will allow universities and polytechnics to increase fees each year as much as they like.

"The result will hardly be surprising - under National in the nineties, fees spiralled out of control because there was no cap. Between 1997 and Labour's first budget in 2000, tuition fees had gone up by 40 per cent.

"In addition, National's proposed cuts to education spending will also force tertiary institutions into requiring students to pay more.

"Because they intend to ring-fence spending at this year's level, universities will lose the extra $73 million they expected to receive for student tuition subsidies from 2006-07.

"Removal of the fees cap and cuts to education together could add more than $2,500 to existing fees for students.

"Any gains that people might make out of this miserly policy would be wiped as a result. National is giving with one hand and taking with the other.

"Clearly National are worried that they have hyped expectations about tax cuts so high they are now trying to disguise all policies as though they are tax cuts, even when they are not, and even when they are adding to bureaucracy and compliance costs.

"Labour is committed to progressively improving the student support system. Under the Labour-led government average tuition fees have already gone down by 22 per cent to $2740 in 2004.

"We have also widened eligibility to student allowances, enabled students to earn more before their allowance drops, and wiped interest repayments off current students. That means students have saved around $250 million in interest.

"Around half the student loan scheme borrowers now have debt that is less than about $10,000. Repayment times have also progressively been dropping - most repay in about eight years.

"The average amount borrowed under the student loan scheme has also stabilised. Between 2000 and 2004, the average amount borrowed rose only 3.3 percent."

ENDS

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