Saturday, June 21, 2003

"Crusty bludgers"

NZPundit has noticed this story on Stuff, about the Elderly racking up student loans. Stuff is shocked, NZPundit thinks that "it would be pretty cool if crusty bludgers like this actually had to pay back his student loan like the rest of us." I think it's pretty cool that someone is still able to pursue education for its own sake, and I'd encourage everyone to consider doing a few extra degrees to fill out their golden years.

As for repayments, the rules of the scheme are absolutely clear: you only repay if you earn over the income threshhold (currently the minimum wage), and the loan is forgiven in the event of the borrower's death. Both of these rules are there for good reasons - to reflect the government's claim that education is a (mostly) private good (the flip side being that if you're not getting that good, you shouldn't be repaying), and to prevent the crippling intergenerational transmission of debt. Of course, if there are rules, they can be gamed - but if its OK for political parties to game the parliamentary services budget allocation rules, or large corporations to game the tax system to decrease their tax bill, then it's OK for people to game the student loans system. And if we don't think it's OK, then I'd suggest that student loans to pensioners are small fry, and we could really gain a lot more money (and punish the most egregious system-gamers) by going after those aforementioned corporations.