Government should front up on plans for student loans

The Government should front up to the public on its plans for collecting and managing student loans, which could mean increased costs for borrowers as private companies seek to make money out of the student loan scheme, Grant Robertson Labour Tertiary Education Spokesperson said today.

“Today's Wellingtonian newspaper reports that the government is investigating the use of debt collection agencies and the establishment of a private company to manage the collection of loans.

“Ensuring that borrowers pay back their loans is important. However, using private contractors, especially debt collection agencies overseas raises the prospect of increased charges and a loss of New Zealand control of the student loan scheme.

“The idea that a private management company may be used to manage the collection process is particularly concerning. A private company would only be interested if there was money to be made through the exercise.

“This might now explain the introduction this year of the new $40 annual administration fee for borrowers by the National government. The Minister needs to front up as to whether this is the case and whether there will be additional charges on borrowers to make the approach attractive to a private company.

“The Wellingtonian reported that its queries were shoved from Minister to Minister and inadequate answers have been provided. This is a major shift in approach and the government should do better than give the media and the public the run-around about its plans.

" Because the government does not have the courage of its convictions when it comes to putting interest on student loans they are now looking to find ways of avoiding their election promises. Giving collection power to private companies means the government can avoid accountability,” said Grant Robertson.

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