Productivity Commission must face up to Generation Debt

Wednesday, 4 November 2015, 1:51 pm
Press Release: NZUSA

Productivity Commission must face up to Generation Debt

04 November 2015

The national student union says with student debt reaching $15b in February, the Productivity Commission's tertiary education inquiry must face up to the elephant in the room: out of control student debt.

Finance Minister Bill English says the Government has asked the Commission to consider “how changes, in technology, costs, and internationalisation, might change the way we fund, organise and deliver tertiary education and training in the future.”

National student President Rory McCourt says the inquiry must measure the impact the increasing private cost of tertiary education is having on students, their families and the economy.

“The last time we had a big review of tertiary education funding it was the the Todd Report in the 1990s, and the then-Government decided that students should pay an average of 25% of course costs. Now we pay over 30% and it’s rising. Students are borrowing like crazy to pay for a shrinking state contribution –we think there are consequences for the economy with these levels of borrowing.”

Mr McCourt says the commission must look at the impact toxic student debt is having on home ownership, retirement savings and the rate of business start-ups among graduates.

Since the Government came to power in 2008 the annual fees paid by a typical university student have risen from $4,060.93 to $6,103.57 per year, - by 50.3 per cent or $2,042.65.

“There’s absolutely no plan about when these fee hikes will end, and what will happen when students begin borrowing $100,000 a head. Good luck to budding entrepreneurs with a millstone like that.”

“Student debt is a growing drag on the economy and the individual prosperity of the 90 per cent of graduates who have to borrow to earn their qualifications, yet the Government has no idea of the scale of that drag or its risks to growth.”

Mr McCourt says borrowing for living costs like rent is also adding fuel to the debt flame.

“The typical bachelors student borrows about $50,000 in public and private debt to make it through university. The Government’s ruthless cuts to student support mean more students than ever before are taking on overdrafts and credit card debt. Will the Productivity Commission look at the impact of that debt?”

“We can’t keep pushing the cost of tertiary education onto students and their families. The Government needs to recommit to publicly funded tertiary education for all.” says McCourt.

Mr McCourt says he will be writing to the Commission to see if they will meet with the union to discuss these issues. He says the Commission needs to listen to the sector before reaching conclusions.

Note: The annual fees figure is the average across New Zealand’s eight universities. It includes compulsory student services fees required for enrolment and completion.

ENDS

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NZUSA - New Zealand Union of Students' Associations

We stand for opportunity, for all.

NZUSA is the New Zealand Union of Students' Associations, the national body that represents New Zealand's students' associations and the interests of New Zealand's 400,000 students at universities, polytechnics and in trades training.

We conduct original research, advocate to Government and through the media, and support New Zealand's students' associations to be more effective on behalf of their members. We advocate alongside Te Mana Akonga – The National Māori Students' Association, and Tertiary Women New Zealand – The NZUSA Women's Caucus.

Since 1929, we've believed in a society rich in opportunity, where anyone from anywhere can become any thing. We support accessible, affordable quality public tertiary education.

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