9/11/2005

Student Loan Scheme Needs To Go

The current debate over the Student Loan Scheme has finally entered the realms of Harry Potter fantasy with the references by both Nationals' John Key and Labours' Dr. Michael Cullen to the ever growing debt being a government asset.

When the loan policy was introduced by National in 1992, on the back of Labour's 1990 $1200 student fee, the predictions that the current outcome would be inevitable were rubbished by politicians from both sides. Now both Labour and National reaffirm they are as one on economic mythology by referring to the Student Debt as a government asset.

How in the name of anything but creative accounting can a liability on students and taxpayers, as this loan scheme is, be magically transformed into an asset?

Where is the asset value in a scheme resulting in instances of lifelong individual debt and graduates buggering off overseas?

How can funding sourced from foreign investors, which contributes about $500 million a year to our current account deficit be an Asset?

How can a scheme where half a billion dollars in interest payments is transferred from the borrower to the taxpayer be an asset to the economy?

The only winner in the whole long running debacle is the provider of the capital for the loans. Every other participant is in varying degrees a loser, the students and the taxpayers in particular and the New Zealand economy in general.

Education is a critical element in the essential infrastructure of our society and should be funded as such rather than used as a periodic punch bag by peripatetic politicians. Visit www.electronz.cjb.net for more education on student debt.

ENDS

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