Student loans ‘a generational wedge’

Herald political journalist Claire Trevett believes the student loan scheme has created a “generational wedge”.

Trevett, 45, started an arts and law degree at Canterbury University in the scheme’s first year, 1992.

She borrowed about $55,000 for fees and living costs in the days when you had to pay interest from day one, starting in 1992 at 8.2 per cent.

The interest was more than her repayments in the early years, so her loan escalated to $90,257 until interest was abolished for NZ residents in 2006.

“I thought I would have a student loan all my life till interest-free came in, because it would just go up every year,” she says.

“It was so overwhelming I just closed my eyes to it and pretended it didn’t happen.”

Friends who went into law paid back their loans. Trevett wanted to be a diplomat but wasn’t diplomatic enough, tried other jobs, and eventually went back to university, AUT this time, to do journalism.

Unfortunately journalism “pays somewhat less than law”. In her first few years as a journalist, paying the extra 12 per cent student loan tax, Trevett “lived from payday to payday”.

“You get down to your last four or five days and you have $5 to live off till payday comes,” she says.

She woke up at 3am worrying about the letters threatening to cut off the power, and once had to ask her brother to pay her dog registration.

“I actually lost weight because I couldn’t afford to eat. I had a dog, and I put his food above mine,” she says. “It did motivate me to not want to be poor for my whole life.”

After 2006 her loan finally started to dwindle. When she tweeted about paying off the last cent in December 2016, she received a congratulatory certificate from Steven Joyce, who was then Tertiary Education Minister.

In those last few years she was on the top 33 per cent tax rate, so the extra 12 per cent meant 45c out of every dollar she earned was going out of her wages.

“Then when I paid it off it made a massive difference to the money in my pocket,” she says. She finally bought a house this year.

How does she feel about it? She is more bemused than angry, seeing younger students getting their loans interest-free and now fees-free.

“I wasn’t necessarily aggrieved about having to take out a loan. I was more aggrieved when they brought in interest-free and I realised how lucky those people had it,” she says.

“It’s a generational wedge. I kind of went there and I can’t stand someone moaning about student loans. I just sit there and think, ‘You don’t know how lucky you are, stop your bleating!”’