Student debt to reach $20 billion

Student loans are breaching the crisis point, sinking an increasing number of young graduates into debt, says Jordan King, Co-President of the New Zealand Union of Students’ Associations.

He said student debt would reach $15 billion by 2015 and soar to $20 billion by 2022, quoting information obtained by the Association under the Official Information Act.

“The figures show that if the current Student Loan Scheme and wider fee structure remain in place over the next decade, it will nearly double, pushing debt levels well beyond crisis point,” he said.

Mr King said the current debt level is $10 billion, impacting adversely on graduates.

“Debts affect major decisions that students should take in their lives, including saving for their first home, starting a business, having a family and continuing study at higher levels.

“Debts drive many skilled kiwis offshore,” he said.

According to him, the predicted doubling of student debt in a decade represented a growing mortgage on future generations of New Zealanders.

He accused the previous National and Labour Governments of neglecting to stop the ballooning of student debt.

“If debt continues to increase at such alarming rates, student borrowers today, they will find themselves paying for their children’s tertiary fees tomorrow.

“This debt only represents the debt that students will owe government. Our Income and Expenditure Survey indicates that students also suffer high levels of private debt to fund their studies,” Mr King said.