Happy interest-free student loan day!
Labour's policies have removed an enormous burden from the backs of tens of thousands of mainly-young New Zealanders, giving them a chance to share in the Kiwi dream. Because of this, getting an education will no longer be incompatible with buying a house or having kids. It will also no longer be incompatible with saving for retirement. People will still pay for their education, but through a mechanism more akin to a capped graduate-tax than an actual loan, and which is a lot less of a burden. And that is I think something we should thank Labour for. They may be cowards on climate change, they may lack the backbone to make a proper stand for human rights on the international stage, they may wilt at the slightest sign of displeasure from the business community or the "hang 'em high" brigade, and fold at the first allegation of "political correctness" from rednecks who would never vote for them anyway, but they have at least managed to deliver in this area.
In fact, the government still charges interest on student loan debts, including while students are still studying. This charge is called a "CPI charge" (or something similar) and is supposed to keep pace with the inflation rate. Watch for this rate to increase over the next couple of years, as the government figures out a way to evade its campaign pledge. The fact that interest is being charge on student loan debt, whether "inflation adjusted" or not is, IMHO, a blatant breach of Labour's 1999 election policy.
ReplyDeleteEducation is incompatible with owning a house? Guess the bricks, mortar and tiles keeping the rain off me, my wife, and our dogs must be a figment of my imagination, huh?
ReplyDeleteSorry Anonymous - you're completely wrong. There is no CPI charge on student loans. This effectively means that loan debt will decrease by the value of the CPI per year, even without repayments.
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