What is it with the right and debt-peonage? Not content with turning ex-pats into permanent exiles with their border arrest scheme, they now want to turn them into debt-slaves by reintroducing interest on student loans:
A proposal to reintroduce interest on student loans has been shot down by the Government before it reached final report stage.
The proposal is one of a raft of recommendations put forward in a draft report by the Productivity Commission, released this morning, which is heavily critical of the current model of tertiary education and how it's funded.
The funding model also comes in for criticism. The commission says the Government should charge interest on future loans at a rate that covers the cost of the Student Loan Scheme.
The Government currently writes off about $600 million of student debt every year, it said - or around 39 cents for each dollar lent.
As noted, the government has already said "no" (because it knows it will be de-elected if it tries). Good. Because student debt is odious debt. It is pushed on students on false promises of economic gain, and students are effectively forced to take it if they want any hope of not being a burger-flipper for the rest of their lives. Charging interest magnifies that crime; there are former students today who still carry the burden of illegitimately charged interest from the 90's, last time the right got its way.
Restoring interest on student loans would be exactly the wrong direction to take. At the moment, student debt is a huge burden, causing people to defer children, locking them out of the housing market, and preventing them from starting businesses or pursuing employment overseas (at least if they ever want to see their families again). It is the root of many of our current social problems. We should be forgiving it, not making it worse.